The Origins of Totalitarianism: Conclusion

The point of this series was to examine the conditions which led to the rise of Fascism in the 1930s to see if there are useful insights that might guide our understanding of conditions in the US today. In introduction to this series, I suggested several points of convergence, and over the last three months I have tried to flesh out those ideas.

The book has problems. The history focuses on Europe, so it isn’t helpful in understanding the rise of totalitarianism in Russia. There is much less focus on the economic situation in post-WWI Germany and Austria than I would expect. Arendt talks about the the large number of superfluous people, the mob and the masses, but there is little discussion of how or why that happened. Fortunately we already read The Great Transformation by Karl Polanyi, so we have some idea about that. The reasons for the displacement don’t seem important to Arendt’s thesis, but the absence is jarring.

It seems to me that the most significant condition that led to the rise of fascism in Germany was the large number of displaced and unsettled people, which I think is the result of economic upheaval due to the costs of WWI and the reparations imposed on Germany. That mob was egged on by politicians and media pushing propaganda about the ideology of the Nazis and setting up scapegoats, especially the Jews. Another important factor was the lack of resistance from elites. But the Nazis would have been limited to the margins if not for the large number of people with no place in society. These are the superfluous people. They have no role in the productive sector of society, and no place or position to hold them reasonably close to the bounds of society. Here’s how Arendt explains it:

The totalitarian attempt to make men superfluous reflects the experience of modern masses of their superfluity on an overcrowded earth. The world of the dying, in which men are taught they are superfluous through a way of life in which punishment is meted out without connection with crime, in which exploitation is practiced without profit, and where work is performed without product, is a place where senselessness is daily produced anew. … P. 457.

That is true in the US and elsewhere today. People aren’t stupid. They know that they are superfluous. They know they have no power, no security and no real hope of either. They hate it. When they see people fired from long-term jobs and told they only get severance if they train foreign replacements to do their jobs, it makes them sick inside. When they are told that their jobs are going to Mexico, and it’s “strictly a business decision” but 1400 people are going to be fired, they are angry and hostile. They know that they mean nothing to their employers, and nothing to politicians. And mostly they know they mean nothing to the elites who dominate the political process and the economy, and who set the system up to screw everyone else. They know the elites despise them as the the NRO’s Kevin Williamson and David French loudly say. They know the elites and specifically the tribe of economists, knew that they would be screwed by NAFTA and other trade deals, and didn’t lift a finger to stop that from happening on the grounds that it all works out for the beset on average. So what if the rich elites took all the gains? The liberal elites will come up with incremental tweaks to fix everything, and the conservatives will resist and nothing will change, and they don’t worry because it isn’t them or their families.

Other factors work into this poisonous stew. There is an ideology: the neoliberal myth of the almighty market, the supercomputer that works out all the details as long as mere humans do not interfere with its mysterious workings. This ideology permeates every aspect of our society, from claims that markets pay what you are worth to the strange idea that businesses should operate public schools.

Liberals deny that they share the ideology, but since 1992, the liberal elites have pushed “market-oriented” solutions to every problem. We can’t use a Pigovian tax system to solve problems, especially a tax on fossil fuels or securities transactions. We need a market solution: cap and trade. Schools are a problem, but we can’t throw money at them like they do in socialist hells like Finland. We need the market solution of charter schools competing with public schools, with the public schools funded primarily by local property taxes, so rich areas get good schools and screw the poor. We can’t have single payer health insurance. We put the insurance companies and big Pharma firmly in control of which working age people get health care and cost of health care for all of us. Liberal elite theory results in the creation of new government sponsored “markets” which create opportunities for rich people and corporations to screw over consumers, like Enron did for electricity.

Then there are scapegoats. The primary targets are minorities, especially African-Americans, but recently the unemployed and the working poor. The neoliberal ideology justifies scape-goating. It tells people that if you don’t succeed, it’s your own fault because this is the best of all possible systems. The losers are labeled as leeches and takers by the winners. The ideology justifies their smugness and their sociopathic demands to cut the social safety net.

Neoliberalism is also an excuse for hating immigrants and Muslims, who are coming here to take the jobs of deserving people, so it actually works to deflect the anger of the first group of scapegoats, at least for those who take the bait.

The conservative elites, such as they are, support this neoliberal ideology, and in pursuit of winning elections add the rejection of science and the imposition of ancient religious prohibitions and standards. The liberal elites are fine with the ideology, though they continue to support Enlightenment values, and occasionally offer a patch to salvage one or two lives. But when the crunch comes, they always side with the ideology and the establishment candidate.

Conclusion

As I reread the posts in this series, I realized how angry I am about the way politics operates here. I am repulsed by the elites who act as if there were no alternative. I am nauseated by liberal wonks whose views of what is possible are claustrophobic. They are the descendants of the liberals who told me and my generation that nothing could be done about the murderous war in Viet Nam. I cannot stomach the conservative elites. They are the scum who think their mission on earth is to undo the New Deal; the direct spawn of the John Birchers and the McCarthyites and the rest of the fear-mongers. They are the wreckers.

Polanyi says that when a social structure imposes too much stress on too many people it has to change. We don’t know how many disaffected people there are In the US, but it is clear that there is an enormous number, in both parties and among the unaffiliated, and that change will come. The US has always prided itself on its openness to change. We believe that everything will work out for the best, because we are the exceptional people, the City on the Hill. We assume that change will be for the best. Arendt points out the sickening reality: some changes are deadly.

Index to all posts in this series

Notre Dame undergrad (math); JD, Indiana University at Bloomington; 1st Lieutenant, US Army.; private practice in corporate and securities law; Assistant AG in Tennessee for consumer protection and securities; Blue Sky Securities Commissioner, Tennessee; private practice, bankruptcy and corporate law.

I have had a lifelong interest in economics. For most of my career, that interest was practical, focused on the problems in front of me. Lately I have been more interested in economics as a theory, especially its impact on the lives of people like those I met in my bankruptcy practice, and on the politics of money in the US. I also enjoy reading philosophers, starting in college and steadily expanding my reading ever since. I wrote at FireDogLake for a number of years.

Generally, I think the problem facing the US is the dominance of neoliberal discourse. I think it clouds the vision, and limits the kinds of problems that can be identified and solved. For example, the existence and danger of climate change can easily be identified in a scientific discussion. However, the problem does not fit the neoliberal discourse because science insists that the pursuit of individual and corporate self-interest will lead to devastation. In neoliberal discourse, the pursuit of self-interest always leads to Eden.

The neoliberal project has two prongs. One is the police function of crushing dissent and alternative views. The police function is provided by government agencies and private and institutional actors. The counterpart is the economic system , which is operated by government and by private and institutional actors. Some of these actors operate in both spheres. I focus on the second prong.

27 replies
  1. bevin says:

    “t seems to me that the most significant condition that led to the rise of fascism in Germany was the large number of displaced and unsettled people, which I think is the result of economic upheaval due to the costs of WWI and the reparations imposed on Germany. ”

    What about the Russian Revolution?

    You may see this as a completely bogus non-event, but it didn’t look like that in 1918 or for years thereafter. It was the big event of the age, the challenge to all that had existed before. It was in reaction to the Revolution that Mussolini’s fascists arose,. And Italy’s industrialists backed them-as a vanguard ready to take on the Unions and the Communists.
    It was in reaction to the revolution, too that the NSDAP was founded-to put down the Munich Communists, to thwart the revolution in Germany and to build a firewall for Britain, for example, against the Revolution’s drift westwards. And that was why Hitler and his friends could always count on support from big business and sympathetic treatment from the state, the court system and the police. All crucial to its survival during the ups and downs of the Weimar.

    All this, of course, did not suit Arendt, because it gave the Revolution an importance that she had discounted by equating it with fascist coups.

    The war and the long series of socio-economic crises which had been by products of C19th industrialisation and the shattering of peasant societies, together with the impact, moral as much as material, of imperialism and colonialism had shattered the old world and opened it to radical change. When the weakest link- Russia- broke the whole European world came into play.
    Suddenly the possibility of revolution was immediate. It was no longer a matter of mere talk and vague aspiration but one of linking hands with a massive eruption taking place in Russia, an eruption that had the possibility of providing material aid, a real counterbalance to the terror of the Bourgeois state.

    Arendt’s tale of Totalitarianism is Hamlet without the Prince- post war Europe with the Revolution relegated to the status of a local coup, a trivial and superficial event barely distinguishable from the March on Rome (with Rome’s approval and the ruling class’ support) or the Nazi seizure of power (at the hand of President Hindenburg, prompted by representatives of the General Staff and Big Business).
    The Revolution had to be trivialised for Arendt’s shallow and self serving thesis to make anything approaching sense to a ruling class desperate to find an ideology justifying the Cold War.

    • Ed Walker says:

      Before I started this series, I checked to see if subsequent scholarship had made the book irrelevant. There are problems, as I have noted, but many of her ideas and much of her analysis have remained relevant. I think the material on the cause of the rise of totalitarianism in Russia is weak. There are other problems, as well. But on the whole, and particularly on the rise of fascism in Germany, where both her background is strongest, are solid.
      .
      I agree that the Russian Revolution was a stunning event, around the world. In Germany, as I noted in this series, the Marxists tried to stage an uprising. It was brutally put down by the nominally leftish Social Democrats, using the right-wing Freikorps, and doubtless the entire German business sector cheered this on largely because they were afraid the communists would destroy their power, and maybe do even worse based on the Russian example. The Freikorps murdered leading German Marxists. I argue that this blunted the will to action of left-leaning German intellectuals, admittedly an argument that Arendt didn’t make. However, it helps explain the silence of the elites as Germany sank into a sea of conspiracy theories and nonsense, all of which Arendt discusses.
      .
      This is all beside the point. Arendt argues that the superfluous people were fertile ground for Nazi propaganda. That seems to be true, and it is on this point that her analysis is based.
      .
      Finally, Arendt preferred the Republican form of government, as opposed to pure Democracies. After her experiences in Germany and in Vichy France, she rightly was very concerned about the capacity of ill-informed and mistreated citizenry to have much hope for the wisdom of their political and policy choices. We can question that preference, especially in light of the disgraceful way the elites run things inn our Republic. But that too is aside from the point of the book. If she is right about the mob and the masses, then that should inform us about the way we manage society as opposed to depriving the masses of a say in their own governance. There is still much to be learned from reading this book.

      • bevin says:

        “..If she is right about the mob and the masses,”
        It is not just that she isn’t right, but that she hasn’t advanced much on Burke or other reactionary critics of the French Revolution.
        It is in the nature of capitalism that it continuously renders large parts of society superfluous, driving the peasant cultivator into handcrafts, the handcraftsmen into factories, the factory hands into domestic service or casual gigs etc etc
        So there are always these ‘superfluous’ people- there are millions around today, here and everywhere else, people whose world have collapsed around them. On their own they don’t produce fascism- at one point they gave rise to the Social Democratic parties (in Germany for example). In the States they backed FDR and it is no coincidence that he was accused of ‘fascism’ because he had popular support, by reactionaries like the Liberty League.

        What led to fascism in Germany was, in large part, reaction to the Russian Revolution. That was what enabled the freikorps (discharged veterans) to thrive, they had paymasters ready to protect them and reward them. And those paymasters were industrialists on the one hand, the state institutions, fearing disorder and the ending of their worlds and, as I suggested, foreign agents such as the British and French determined to stop the march of bolshevism westwards.

        Much of what Arendt has to say is standard Frankfurt School stuff-very insightful too, much of it, marrying Freud to Marx and providing antidotes to stiff mechanical determinism. It was well received in the States where Adorno, for example, had become influential and Marcuse too but Arendt says little or nothing which is original or builds on the ideas she was acquainted with before she came to America.
        I suspect that she was more surprised than anyone at the reception her work got. And probably a bit disturbed too.
        To sum up: the book is a Conservative critique of ‘democracy as mob rule.’ In the early fifties there was a live market for ideas that artistic and intellectual elites were endangered by vulgar populism and luxury about to be erased by egalitarianism.
        One thing we know today is that we don’t need to worry about confiscatory taxes reducing our elites to poverty and preventing them from patronising genius.
        We also know that if Hitler comes to America he won’t be sponsored by angry white truck drivers or superfluous factory workers but ALEC and the Koch Bros. Just as the original was in Germany, Mussolini was in Italy, Franco in Spain and so on.
        And that is important: nothing is more certain to lead to the triumph of fascism than for “the left” to lose faith in democracy and, by disdaining the people, to drive them into the arms of faux populists, financed by the Kochs, Trumps and all.
        Arendt urges us to fear the people. Instead we must trust ourselves, all 99% of us.

          • bevin says:

            I know that you don’t agree. The site seems to be going through a delicate phase again, so I won’t say more, except that it may be of interest that the first systematic economic critiques of liberalism came from the American System partisans and Friedrich List.
            Ha Joon Chang’s “kicking away the ladder” or “Bad Samaritans” might be worth looking at.

        • wayoutwest says:

          Bevin, you make some very good points especially about who actually drives the movement to fascism in its many forms and it isn’t the people, mob or masses leading this change although many may follow or be manipulated by the leaders. The mob does and has always provided the elite, Conservative and Liberal along with their minions, an easy target to attack and use to justify their authoritarian position guiding the rabble who can’t be trusted with democracy and must accept elite class dominance.

          It’s telling that the Liberal elite and their mouthparts are using this mob meme against Trump and his supporters and to a lesser extent against Sanders and his mob because they both represent an insurrection against elite dominance in a totally corrupt system.

          I’m not sure what you mean by ‘the left’ losing faith in democracy, neither exist to any meaningful degree in our Liberal/Conservative ruling elite continuum.

    • Synoia says:

      The bigger point is, before WW I there were The Russian Empire, The German Empire, The Austro-Hungarian Empire, The Ottoman Empire, The French Empire, The British Empire, and The US (an Empire even then).

      After WWI there were The French Empire, The British Empire, and The US (an Empire even then).

      After WW II their remained The US.

      • bevin says:

        I disagree: there was a qualitative difference between the British Empire and its rivals. Just as it had, sometime in the early C18th, displaced and subsumed the Dutch Empire, so it underwent a seemless transition, between 1916 and 1945, roughly into its present form the US Empire.
        What makes it unique, and probably spells its obsolescence, after 500 years, is that it is a maritime empire, founded on the vast wealth of America falling into the hands of Europeans and suddenly vaulting them, from marginal status on the cold and wet edge of Eurasia, into a position to dominate world trade.
        The Hapsburgs, Germany, France were rivals, certainly, but what they sought was to take over the prize that eventually the US got: command of the seas.
        Russia is slightly different because it was and is outside the system- a real rival, then and now, with no need to command the seas and the potential of commanding Eurasia and Africa from the land.

  2. bloopie2 says:

    I’ll tell you, this has been enlightening. It’s one thing to know or sense something, another to have its basis explained to you over a period of time when it can sink in and take hold. Your series has done that. I may have had some quibbles with your writing style when your (justifiable) anger took over, but in the end it’s all for the good. There’s so much to be angry about every day that I can’t take it some times. You are a good teacher, thank you. An apple for you? Or a gold star? You pick.

    • bloopie2 says:

      And kudos to emptywheel et al. for putting you on as a regular (why do I think of Cheers when I write that?)

  3. Alan says:

    There is an ideology: the neoliberal myth of the almighty market, the supercomputer that works out all the details as long as mere humans do not interfere with its mysterious workings. This ideology permeates every aspect of our society, from claims that markets pay what you are worth to the strange idea that businesses should operate public schools.

    *
    Yes, it is a myth. The “mysterious workings” are imposed and are therefore contingent on human interference. Hayek provides a critique of a certain sorts of knowledge elites but he and others now associated with what we now know as neoliberalism are also a new knowledge elite. This is a contradiction you’ll see picked up and attacked by Mirowski in various places.
    *
    There’s a very important literature on elites that we really haven’t taken up much in this discussion e.g. see my earlier post on C. Wright Mills. And this all hooks into critiques of rationality in Weber, Foucault and others. For a forthcoming publication on elites and neoliberalism that takes up many of these themes see: William Davies (2016) From Jurisdiction to Translation: Elite Power Under Advanced Neoliberalism, in Theory, Culture & Society. The Pre-print is available here.
    *
    The Davies paper also picks up on the “core paradox of neoliberalism is that the construction of this type of self-organising, cybernetic system would be the work of intellectuals and states.”
    *
    How all this relates back to the Smithian critique of political/social and economic elites, as well as large institutions, in Wealth is also worth considering. Hayek is not Smith.

    • Ed Walker says:

      In my posts on liberal elites, I began thinking about US elites, mostly about the liberal elites, as the conservatives have clearly lost their minds. The liberals have decided that using models is the best way to decide on public policy, That means that the drivers of policy are basically averages rather than specific impacts on people and thier communities. Politics is the way average people get leverage on those averages to make things work better for them. When politics is driven by models and averages, people get lost, and their communities get lost.
      .
      Perhaps one good question would be: how do we change elites? I’m tired of the current group, but I don’t even know what to look for in a new set.

      • Alan says:

        blockquote>Perhaps one good question would be: how do we change elites? I’m tired of the current group, but I don’t even know what to look for in a new set.
        I agree. This is a very important question but I do not think there are easy answers.
        *
        There are some very interesting interviews with Foucault about power and resistance that are worth reading. The “new set” is likely to emerge from within and they’ll come with their own dangers. If there is a takeaway it is eternal vigilance; eternal resistance. As Foucault writes, “everything is dangerous”. Resistance is never accepting “anything as definitive, untouchable, obvious, or immobile”. See:
        *
        Power, Moral Values, and the Intellectual: An Interview with Michel Foucault and additional discussion here.

        Relations of power are not in themselves forms of repression. But what happens is that, in society, in most societies, organizations are created to freeze the relations of power, hold those relations in a state of asymmetry, so that a certain number of persons get an advantage, socially, economically, politically, institutionally, etc. And this totally freezes the situation. That’s what one calls power in the strict sense of the term: it’s a specific type of power relation that has been institutionalized, frozen, immobilized, to the profit of some and to the detriment of others.

        I’m not a prophet; I’m not an organizer; I don’t want to tell people what they should do. I’m not going to tell them, “This is good for you, this is bad for you!” I try to analyze a real situation in its various complexities, with the goal of allowing refusal, and curiosity, and innovation.

        *
        Also see ‘On the Genealogy of Ethics’ in Dreyfus and Rabinow:

        MF: I wonder if our problem nowadays is not, in a way, similar to this one, since most of us no longer believe that ethics is founded in religion, nor do we want a legal system to intervene in our moral, personal, private life. Recent liberation movements suffer from the fact that they cannot find any principle on which to base the elaboration of a new ethics. They need an ethics, but they cannot find any other ethics than an ethics founded on so-called scientific knowledge of what the self is, what desire is, what the unconscious is, and so on. I am struck by this similarity of problems. Q: Do you think that the Greeks offer an attractive and plausible alternative? MF: No! I am not looking for an alternative; you can’t find the solution of a problem in the solution of another problem raised at another moment by other people. You see, what I want to do is not the history of solutions-and that’s the reason why I don’t accept the word alternative. I would like to do the genealogy of problems, of problematiques. My point is not that everything is bad, but that everything is dangerous, which is not exactly the same as bad. If everything is dangerous, then we always have something to do. So my position leads not to apathy but to a hyper- and pessimistic activism. I think that the ethico-political choice we have to make every day is to determine which is the main danger.

  4. earlofhuntingdon says:

    Mobs are often justified in being angry and “hostile”, but not violent. Their homes, their jobs, their children’s futures are being dismantled in front of them, and they are asked to peacefully aid and abet it. Mob anger is community anger against injustices so persistent and blatant that they unify people with divergent interests. As with government, which claims an exclusive right, it is the implicit threat of violence, at least to priorities, that spurs action.

    The mob’s potential to unify, to organize concerted action terrifies the establishment. In the hands of an exceptional leader (such as FDR, but not a marketer like Mr. Obama), it can lead the establishment to reform itself. More often, the establishment responds with suppression rather than reform. It engages in culture wars against nonconformity – McCarthy, the far greater number for whom he was a stalking horse, the backlash of the Sixties, the patriotism-as-religion crowd today. It engages in its own counter-violence, reported as “keeping the (establishment at) peace”, never “violence”. It engages in large scale surveillance (J. Edgar’s voluminous, gossipy, officially unofficial files).

    The mob’s capacity to spur change is its most important attribute, which leads the government to bring to domestic policing its foreign war making expertise, including pervasive surveillance.

    The establishment exults in the capacity to organize when it is directed toward preferred lobbying or political electioneering. That capacity is an existential threat when practiced by its opponents. That gives us campaigns to tell us, a la Reagan and Thatcher, that we are not self-evidently social and political animals, but atomized economic resources, the better for us not to pursue our aims as aggressively as the marvelously organized, disciplined and well-funded American Chamber of Commerce.

    The greatest existential threat is one voice that can stir millions. John Lennon imagined a different world than Richard Nixon. Like King and RFK, he inspired millions to seek it out. Imagine what we could do if there were more of us who did the same.

  5. earlofhuntingdon says:

    American mythology is as abundant as that of Olympus. One myth is that we have a free and open society, where any man can make his fortune. Perhaps by the standards of pre-Revolutionary France. But Indian genocide and the 3/5th’s compromise should have marred that, as should the statistic that by 1700 much of the land east of the Alleghenies was tightly controlled by a small number of families. The great frontier, stealing land and lives from the Indians, kept that mismatch from boiling over. And every man can make his fortune? The stats on that are comparable to the number of kids who play like Jordan or James. California’s Big Four, for example, didn’t make their money panning for gold in 1849; they made it selling shovels, tents and pans at outrageous prices to those who did, most of whom ended up dead or more broke than when they started. Unlike their customers, they were monied men when the idea of a transcontinental railroad came along.

    One myth is that our founding fathers were like gods. They were sometimes brilliant, they were sometimes farsighted and goodhearted, they were always flawed men and nearly always the monied elite. Franklin was among the richest. Washington, too. He also made money from large congressional land grants, and as president used the army to enforce them against the poor settlers that Hamilton mislabeled as Whiskey Rebels. A brilliant self-made man and courtier to the monied elite, Hamilton would find much in today’s Washington to his liking.

    Another myth is that we are open to change. We really don’t like it much, but we’re not alone in that. The history of racism in America (where only a fraction of Africa’s slaves ended up; more went to the mines in Brazil and the plantations in the Caribbean) is a good example. One reason is that racism is intertwined with our need for Said’s “other”. Another is that it was integral to economic relations that benefited so few, such as the slave pyramid: slaves themselves were valuable, the crops they raised (with a great assist from technology, such as the cotton gin) were valuable, the land from which they came was therefore made valuable. Reconstruction was a blip, leading to the long drawn out saga of Jim Crow and his partial toppling beginning in the 50’s and 60’s. Mr. Obama’s propaganda notwithstanding, racism is still very much with us, as is our resistance to change.

    We are perennial optimists. It helps keep us going against fearsome odds. It also helps make us vulnerable to the latest snake oil salesman. Change may be inevitable, but like evolution, it is not directed. It works only from available alternatives, and only for the purpose of local and immediate adaptation. Mr. Obama, like most politicians, is exceptionally well-adapted to meeting the needs of contemporary power elites. We need to look elsewhere if we want constructive change, if we want to revise that power structure to meet the needs of those of us not in that elite. Our optimism tells us we can do it.

  6. earlofhuntingdon says:

    Many thanks for this series, Ed. There must be other books to review to keep this critique and commentary going, to help us explore the people, the themes, the sociology of how they were exploited or suppressed. Elite reactions to the popular C. Wright Mills at Columbia, for example, or William Sloane Coffin at Yale, help explain why it is so hard for their successors to obtain tenure at Ivy League schools, and why regents at public Ivies such as Berkeley have commercialized and privatized the commons – to prevent them from being used as platforms for charismatically expressed views that conflict with those preferred by the elites.

    • Ed Walker says:

      The thing about neoliberalism is that people don’t even recognize it as an ideology. It seems like the way things are. Excavating it from the our daily lives is really difficult, and your descriptions are very helpful.
      .
      When I started working on this stuff, I had the idea that the foundation of neoliberalism was economics, but I’ve been thinking lately that it colors all the other academic disciplines. Reading these older books really highlights that for me, because they do not seem to be influenced by the theories of the rich.
      .
      My first thought is Thorstein Veblen, the Theory of Business Enterprise, but it’s really long and the laguage is difficult for us 120 years later. WE’ll see.

      • Bay State Librul says:

        Good luck on your journey

        ——
        My quest ended with a “road to nowhere”


        I believe the answer is compromise

        Who says we have all the right fucking answers?

        Take a big gulp of uncertainty.

        Who knows?

      • earlofhuntingdon says:

        I think you have identified the greatest accomplishment of the neoliberal thought collective: making its tenets seem to be a part of the fiber of American culture, economics and politics rather than brutal, one-sided ideology that it is. That accomplishment seems to be a self-fulfilling prophecy. But like most golden idols or dictators’ statues, it can be toppled, with sustained and creative opposition.

        Yves Smith, for example, has elegantly described the neoliberal lie that enhancing cash returns to shareholders was the prime directive for corporate management. (An aspiration most famously touted by Milton Friedman.) Shareholders’ interests are important, but they are explicitly secondary to a stream of other interests. Wall Street, however, took up Friedman’s cudgel, and especially with the rise of private equity (conjoining ownership and rapacious lending and self-dealing), has given Friedman’s false claim the feel of holy writ.

        Nevertheless, Yves Smith’s was a good shove back against the neoliberals and their culture war. Pummeled by sustained blows from neoliberals, Main Street Americans need to be reminded that their work provides the elite’s profits and the political stability that protects them.

  7. Bay State Librul says:

    Enjoyed the series but your conclusions leave me perplexed

    —-
    Wasn’t it Plato who believed that “The state is formed because it is better for individuals if they band together so as to benefit from a division of labor, and the excellence which
    accrues to everyone when each does that, and only that, which he/she is very good
    at doing. ”

    2016 interpretation for me: Jobs, jobs, jobs…
    —-
    Freedom from domination of the strong? Philosophically correct, but works only in utopia.

    We are all guilty of propaganda. For me, the last eight year’s under Obama’s leadership has been the best under the circumstances

    Look elsewhere if we want constructive change: please give me a realistic answer to that one?

  8. orionATL says:

    ed walker,

    thank you for bringing your work to emptywheel website.

    you have engaged in a remarkable and admirable intellectual journey. by that i mean that without formal training in economics or philosophy you have read and studied important texts in these areas and turned your personal learning into a series of essays and practical lessons of relevance to our society. for me at least, the key relevance was your focus on what we casually term “the markets” or “the marketplace” without a second thought about what varied real-world institutions that term describes, about the economic thought developed over time to justify “the market”, especially “the free market”, and about how markets can and do effect our lives for the worse.

  9. earlofhuntingdon says:

    Citing Plato in support of the purposes of government as expressed by the current American political system seems academic to me.

    My argument is that change starts locally, for progressives as well as for ruthless opportunists. Take Karl Rove’s Alabama campaign. He started with helping to elect hard right candidates to judicial office. Not a state often cited for its jurisprudence or economy. Relatively inexpensive election fights for court seats. Conservative politics. In a few years, with backing from staunch conservatives, he obtained that near monopoly, planting very conservative judges throughout the trial and appellate courts. It became a go-to jurisdiction for the right, from ten commandants-spouting supporters and judges to forum shopping lawyers who wanted business-friendly decisions.

    The judges and prosecutors whose elections Rove helped win became a virtual farm team for recruiting conservatives to the federal bench, to US Attorneys offices and elsewhere in the federal government. Rove’s victories deprived center and left candidates of all of the above. With similar victories for state legislators (rarely supported compared to congressional candidates), Rove spearheaded such movements as “tort reform”. Rove’s alleged tort reform was a direct business subsidy, as was the 2005 bankruptcy reform act, which helped save starving, cash-poor credit card companies.

    Apart from directly aiding businesses, Rove’s tort reform had the intended consequence of cutting incomes of the plaintiffs’ bar, historically staunch supporters of Democrats. As a result, business and political backers came running to Rove and to Alabama. Rove made a national impact, starting with a few local judicial elections in a peripheral state. That’s grass roots action.

    Rove took a similar approach when he latched onto a ne’er do well scion of an old New England power-elite family. He turned a 40 year-old repeated business failure and recovering alcoholic with little but his family’s name into a governor and two-term president. True, W had been failing up his entire life. That was owing to his dad’s achievements and to those of past Bushes, who had been attending Yale and hobnobbing with robber barons for generations. But Rove helped give W national rather than family or local prominence. That’s working for large-scale change by starting small, with seemingly poor material.

    In a manner of speaking, Rove’s work in Alabama enclosed a commons for the benefit of the right. That’s classic neoliberal economics. Those who oppose his priorities and those of his sponsors, and there are many, should take note.

    • Bay State Librul says:

      If Plato doesn’t work for you, how about York from Richard II
      ——
      “Tut, tut! Grace me no grace, nor uncle me no uncle!
      I am no traitor’s uncle, and that word ‘grace’
      In an ungracious mouth is but profane. . . .
      Coms’t thou because the anointed king is hence.. .”
      —-
      Yeah, Rove is an example of “deconstructive” change. I’m looking at the positive. Maybe, Elizabeth Warren would be a good example of the way forward.
      —–

      • earlofhuntingdon says:

        Elizabeth Warren would indeed be a good example of the way forward. She also illustrates how hard it will be. She’s a stellar example of the self-made woman, a divorced working mom who scaled the law and politics ladder: top marks at a mid-level law school to tenured professor at Harvard to US Senator. She also knows her limits and the extent of the power-elite arrayed against her Main Street priorities. Otherwise, she would be running the SEC or the DoJ, or be on the Supremes (as would Dawn Johnsen), or be running for president. (Perhaps she’s Bernie’s first choice for VP.)

        Her existence and success are among her greatest attributes. She’s a mentor and role model of national stature, the kind the right has tried to make extinct since Mills died and Coffin retired.

  10. bevin says:

    I’m reluctant to post something this long but its too late to worry about that now:

    The elites in question have a long pedigree.
    From the earliest days of the Republic there has been a tension between the commodity exporters, on the one hand, and the ‘yeomanry.’
    The yeomanry argued that the internal markets should be developed and protected, (the American system) while the plantation owners wanted free trade.
    The Protection argument usually prevailed. It certainly was the most appealing to the populace.
    Both sides are racist: the free traders are for low wages, and no wages if possible, they are for every sort of anti-union law and for ignoring the law to fight unions. They are for indentured labour, ‘illegal’ immigration, unrestricted immigration, whatever, to lower labour costs and enhance its ‘flexibility.’
    The American System is for free soil, homesteading, high wages to sustain demand. Its icon is the self sufficient farmer, the American Peasant or yeoman, selling his surplus but living, largely, off his own and his family’s labour. It is for restricting immigration, against slavery and indentured coolie labour, against ‘illegal’ immigration, and for strict controls on immigration. All of which lends itself to racist politics.
    Modern US history until the Second World War was dominated by protectionist sentiment: immigration was closely restricted, particularly after 1919. Internally, Jim Crow restricted black entry to the Labour market. Tariff barriers allowed employers to pay American wages, which fostered the growth of the ‘middle class’.
    After the war these barriers seemed unnecessary. Around the world economies could not compete with the US, protectionism seemed redundant and, over the years, tariffs declined. Their place taken by farm subsidies and state contracts for military aviation and arms.
    The parties involved had not really changed: the plantation owner had become agri-business . It still unemployed large numbers of badly paid workers, most of them either ‘illegals’ or on temporary seasonal permits. Most year round labour was replaced by machinery.
    The triumph of the neo-liberals was to dismantle the system of protection –the American System- and get rid of the “middle class” the well paid, well treated working class, with all the institutions-from Unions to Land Grant Universities- which had nourished and reproduced it, without the victims being able to defend themselves and to insist on refreshing their protective mechanisms.
    Now that there are signs that across America the victims of free trade policies in a global marketplace are waking up and beginning to demand, in effect, for the American System to be rebuilt: for a living wage, for an efficient and affordable health service, for free tuition and debt relief the nation finds itself in a situation reminiscent of those from which in the past fascism has sprung.
    Ideology is no longer enough: preaching ‘free trade’ and globalisation, the ultimate benevolence of the market and a notional equality of opportunity once worked. The people nodded off, they were happy enough and political theory bored them. Now it is likely to get the preacher lynched. People realise what all that tedious Chamber of Commerce talk adds up: poverty and humiliation, debt peonage and scrabbling after extra jobs, paying gigs, working until you die.
    And the ruling class-the old plantation owners’ class- are reduced to fending off the impossible demands of those dreaming of the American System by means other than setting up Think Tanks for neo-classical economists to use.
    What are those other means? Foreign wars are one staple, blaming foreigners for problems and using emergency measures to focus opinion in a patriotic effort. Racism, always present, is another and allied strategy. But in the end, neo-liberalism implies employing the state power to defend the corporate elite violently.
    And that is where fascism comes from. Not from the protectionism of economic nationalists, or even anti-immigration movements to restrict the competition for wages. Even racism, though it gets in the way can, as has been shown co-exist with the American System. Indeed it was integral to the System even though it was a flaw which weakened it, ultimately, fatally.
    The problem with the American System has always been that it could not last because it contained within itself, in its defence of capitalism and markets, the seeds of its own destruction. It tended towards free trade which contradicted it in practice.
    It is much more complex than this- identity politics and conservative family values, are both important sets of issues with a bearing on attempts to resolve the social crisis- but essentially it is, everywhere, a matter of protection versus free trade. The challenge is for those insisting on protection- who almost certainly constitute more than two thirds of the population- to recognise that the days when the American System worked, because America was so wealthy and because the population was always expanding and otherwise changing so rapidly that it never had the opportunity to take stock of itself, those days are long past.
    The American System is still possible- a vast middle class with rising living standards and broadening horizons-intellectual and artistic as well as otherwise- is completely realistic. Poverty can be banished. Leisure and long retirements, free healthcare, a pleasant environment and plentiful housing are all very realistic aspirations. But they will require the American System to be socially rather than market ruled.

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