The End of Elections in the Neoliberal Era

17 03 2011

The time for elections as the focal point of activism has expired. Activist participation in elections, and elections as the organizing focus for economic justice movements is finished, and activism inside the Democratic Party is not distinct for the result it produces from activism inside the Republican Party. There are differences between Democrats and Republicans, but is gauged only by degrees of resistance to corporate power, which is not a strategy that can ever make progress. Therefore, the “electoral strategy” of trying to achieve justice through political elections has proven ineffectual, and electoral activism circumscribed in its value.

Neutered Elections

In the city of Deadwood, South Dakota, an intensely rich gold find carved society into wilderness. Men poured into a small gulch in the Black Hills to make their fortune. Miners panned and chiseled for enough of “the color” to drink, gamble, visit brothels, and put a little by for family they’d left back home.

Until that is, the introduction of amalgamation by capital. The gold could not be produced “efficiently” without that process. Wealthy and powerful interests (in the HBO show Deadwood, represented by an unquestionably cariactured George Hearst), moved in to buy up land from panicked homesteaders. What had been a community of small businessmen and free miners slowly transformed into a community or wage earners. Quality of life dipped, and to serve these wage earners, cheaper labor had to be brought in, from China and Europe, to produce what local goods were produced and to work at laundry, food preparation, etc. The labor market got worse–one major employer creates a virtual monopsony. The homesteaders left to go west, and were replaced at the mine by cheap immigrant labor. Deadwood turned into just another American town.

Poor Charlie Utter, who knows what’s coming but can’t quite understand it.

The need for one owner to control so many workers of course created a social strata of managers, foremen, and security, who could enforce Hearsts’ will.

This brings me closer to my point. In David Milch’s Deadwood, Hearst, played maniacally and brilliantly by Gerald McRaney, has a certain cavalier attitude towards coming elections that is instructive to us at this point in American history:

I’m an optimist, so I see a bright future for the American republic; though I see that future coming after some pretty nasty times in the immediate offing. The neoliberal consensus (in its broadest meaning, distinct from the “Washington Consensus”) has won the day. Even supposedly “liberal” political leadership subscribes to the neoliberal consensus.

Corporate power neuters the results of elections by stovepiping elected officials, narrowing their range of movement to within the confines of neoliberalism’s policy consensus. Once we accept this forlorn fact, much follows.

Neoliberal Consensus

Before I use the expression again and test your patience, I can define it for you, first formally and then substantively: the “neoliberal consensus” is the guiding set of political, economic, and social principles that took root in the early 1970s, exploded into Western society with the ascension of Margaret Thatcher, Ronald Reagan and Deng Xiaoping in China. Once it took hold of the policy apparatuses in Western nations and its client states, its power grew exponentially; with the fall of the Soviet Union and the Soviet system, the abundance of new markets available to it served as fuel for an already raging fire.

Those principles in substance are essentially that profit is the purpose of all human endeavor; that profit-seeking is the only guarantee of efficient operation; that the freer a market, the better the result for all operators within the economy where “freedom” of a market is defined as restrained government intervention; that the purpose of social and political institutions is to protect private property, with all other rights and benefits flowing “naturally” or “spontaneously” from that protection; that freedom is essentially freedom of choice in a marketplace. Neoliberals, many of whom confuse themselves with libertarians, eschew what they term “social engineering” based on the idea that the market process is one of “creative destruction” that leads to “spontaneous order” in the form of the best of all possible outcomes, which is the most freedom in the form of most agency, or choice, by the consumer.

Neoliberals predicate this on the fact that any time the state acts to solve a problem–say, providing health care to all citizens–the result will be first inefficient because there will be no profit-seeking; and second, immoral because it uses the “coercive power of the State” (i.e., taxation) to effect an outcome, when “free minds exchanging freely” could come to the same result if only the government would confine itself to merely “enforcing a market,” or protecting property rights and keeping taxes and regulation as low as possible.

Neoliberals see democracy as less democratic than free markets–because in a democracy, the majority can bind the minority to a policy (like taxation), but in a market, all choices are freely ours, and so therefore no one person or group can bind any others. That isn’t to say there is no role for government–this is where they depart from actual libertarians. Neoliberals think the state does have to act in situations where capitalists can’t serve a necessary class interest through competition, or in situations where markets do not exist but should. As an example of the former, the 40-hour work week. As an example of the latter, the second Iraq War.

Inside the neoliberal consensus, the entrepreneur takes the place “the worker” held in the broad socialist consensus of the early 20th century. The Entrepreneur–really, just a capitalist–is the agent of change, creation, and innovation. He is idealized and sanitized, and made noble just as the worker was by socialist writers of that silly era. The Entrepreneur isn’t relegated to producing widgets: there are Social Entrepreneurs who through their endless ingenuity (and ready access to capital) can produce social and moral goods while turning a profit, thus confounding the social engineers through sheer elan.

The entrepreneur can solve any problem; for every social ill, the solution will come in the form of entrepreneurs, seeking profit, finding the most efficient solution as a means of turning a profit. Any potential negative side effect is the result either of inefficiencies caused by government coercive pressure (regulation, taxation) or will eventually be “selected out” by the forces of the market as consumers eschew those entrepreneurs (and firms–though we’ll get to this distinction later) who cause negative phenomena in favor of those who behave well. Once the government gets involved, it begins “picking winners and losers,” in their phraseology, and therefore bogs the process down in corruption through rent-seeking, or the efforts of individuals and firms to use the power of the state for their own benefit.

A pattern emerges: the neoliberal consensus is given to tautology or, more poetically, Panglossianism: every negative outcome (say, desperate poverty) of market activity is never the result of market activity but a result of a lack of sufficient freedom in that market activity. Whenever the market fails, it is because it was not free enough; when it succeeds, it would succeed better if freer. There is no falsifiability. In this sense, it is exactly like statist socialism or communism.

From a policy standpoint, the neoliberal consensus essentially argues for creating markets in every area of human relations, and transforming every individual into an Entrepreneur. Transit systems would be better if operated for-profit, so they should privatized; health care would be better distributed if profit-seekers ran it, so it should be kept wholly private; education would produce better “outcomes” (another problem with neoliberalism we’ll get to) if competition and profit-seeking (or quasi-profit seeking) were introduced; where any industry is under state control anywhere on Earth, pressure should be brought to bear to open up that industry to profit-seeking and competition, and, once thus opened, property rights should be preserved against every other interest, as that is the only way the market can operate freely enough to reach the efficiency that would benefit everybody.

From a cultural standpoint, this consensus enforces the idea everywhere that individuals are consumers and consumers only. This is an important point, because the arguments used to prop up neoliberalism rest on the idea that since its precepts provide for cheap and diverse choices for consumption, it, and only it, can serve humanity–“consumers.” Neoliberal (and libertarian) thinkers have a near-obsession with characterizing all human relations as ones of exchange or consumption, with preference to the latter. Individuals are atomized as consumers, who gain more and more freedom as they are able to consume a growing diversity of cheaper and cheaper goods. It is important for neoliberals to ignore the fact that every consumer is also in material reality a producer; that in order to consume we have to sell our labor. That mechanical, materialist portion of the analysis is always left out, precisely because hyperproduction of cheaper and cheaper goods requires a ceaseless stream of ever-cheaper labor.

A quick case study that will bring us back to the political side of things: NAFTA. The North American Free Trade Agreement was going to lead to the decimation of manufacturing in the United States, which had been in steady decline for a generation, since the early neoliberalization of trade regimes following the opening of China and liberalization of former Soviet economies. As manufacturing was the bedrock of the labor movement, it would also lead to the collapse of the labor movement in the private sector, as the proportion of workers protected by collective bargaining agreements would shrivel, and therefore reduce the bargaining power of people who sell their labor (i.e., almost all of us). However, that was okay; so long as capital (“entrepreneurs”) could move freely over borders, then even though the real income of workers in the U.S. would decline, capital would be able to furnish cheaper and cheaper goods, so their relative buying power would not appear to decline (though it still was declining). Yes you’re going to earn less as measured by your productivity, but it’s okay because furniture and televisions and clothes and eventually food will be cheaper.

A Safe Harbor in the Democratic Party

The Baby Boomer generation has had a malign influence on the human family. We eagerly await that cultural and political extinction.

Beginning with their coming into political consciousness in the late 1960s, the Baby Boomer generation was averse to class concepts of politics because the stark class conflicts of the pre-war era were wholly unknown to them. Meanwhile the specter of Soviet domination, with its dehumanizing political philosophy, made them averse to the type of class analysis that formed the bedrock of the pre-war left. The result was that the supposed “youth left” that galvanized in 1968 and staged its first storming of the palace in 1972 was fragmented in its approach to economic justice and hostile to the institutions of the labor movement–unions–which had fought so hard to lock them out of Party politics in ’68 and ’72.

To get revenge on the unions they saw as buttressing the power of the Democratic Party’s “establishment,” the New Left locked unions out of any structural role in the party through procedural reforms after the 1968 Democratic National Convention fiasco. At the same time, across the aisle in the Republican Party, big business was just beginning to take a serious institutional role in the party. The dispersal of the Powell Memo, arguing for the dire need for America’s most powerful business institutions to organize and act collectively, spurred the creation of myriad business organizations that situated themselves first in the Republican Party. The Business Roundtable kicked that party off, with the express purpose of breaking what they saw as the outsize influence of labor in the economy. (Today, the Business Roundtable has close ties to President Obama).

Weakened in their traditional home and with their natural opponents newly re-constituted and with direct access to the levers of power, labor was no longer able to provide its natural countervailing force to the influence of capital.

The reaction of the Baby Boomers now in increasingly firm control over the “left” in the late 1970s and early 1980s was not to find a way to reinvigorate labor’s role in the economy, but to continue to take labor’s money while making the Party comfortable for big business. Thus, the rise in influence of the Democratic Leadership Council (DLC) in 1985.

Labor’s own lazy reliance on political force to enforce its economic will brought them to that place: by making the institutions of the labor movement (unions) merely factors in political calculations, they trivialized the important role a strong and vibrant labor movement has in an economy. Democratic Party leaders, seeing a labor movement in steep decline, an industrial base vanishing, and voters unimpressed by the endorsements of their union leadership, saw courting business support as key to their survival.

Well, them and plaintiff’s lawyers, who had taken up labor’s role in re-distributing income through litigation based on discrimination, consumer protection, and environmental statutes. (This role was quickly confronted by hysterical cries for “tort reform”).

Part of this courting of business was subscribing to the neoliberal consensus, that we are all consumers, that only profit-seeking produces positive results, that every market failure is due to a lack of optimal freedom, and that collective bargaining by workers create onerous work rules and conditions that burden the entrepreneur, thus reduce competitiveness, and thus “destroy jobs.” This point was proved in the renewed effort to create “right-to-work” legislation that made reduced workers’ bargaining power state-by-state, encouraging a “race-to-the-bottom” as states competed for capital by lowering their working standards.

The posture of the Democrats, no less than the Republicans, became that “jobs” were a commodity owned by entrepreneurs, who had to be coaxed and incentivized to share them with a general public desperate for them. They were reified into “job creators” who, like deer, are easily spooked and have to be tenderly and lovingly handled.

This construction was a natural result of the neoliberal consensus, which rests on abstract concepts to hold up its policy apparatus: in this case, the “job creator” creates the job out of entrepreneurial spirit, and the job, like an apple, is handed out for good behavior. In reality, of course, every job an employer “creates” is created only at the point when not another penny of profit can be generated from the current workforce: “entrepreneurs” (capitalists) after all make their profit from the surplus value of labor: the difference between the value of the labor and what they pay for it. Every job created represents profit for them, and the job created is not created until it must be, because the existing workforce doesn’t physically have the capacity to work any more.

Or, intrusive government regulations like 8-hour work days, age of the laborer, harshness of the working conditions, mandatory breaks, etc., “artificially” (as they say) limit how much productivity they can squeeze from each worker. These conditions are typically regulated by collective bargaining agreements which determine how much work each person can be required to do. No agreement, no rules. Employers get absolute dominion.

There is no difference between Democrats and Republicans–or even liberals and conservatives–on these points. The debate between the two sides comes in the form of practically seeking petty differences: just how low can we make the taxes? What is the absolute minimum of regulation needed? How can we ameliorate poverty without “violating” absolute property rights? Is there a way to provide health care without endangering profits? Can we get women equal pay through legislation rather than collective bargaining? Can we keep employers from firing people for being gay without “violating” the absolute dominion over the job they created?

The Two Percent Nonsense

I have never been impressed with Barack Obama, and while I appreciate that my perceptions were not mistaken and therefore I wasn’t the racist/cynic/contrarian/whatever else I was called for criticizing him, I am disappointed because the depth of his political cowardice is endangering the livelihoods of millions of his fellow citizens. Obama has always been good at adopting the language and attitude of a principled fighter for justice without ever sticking his neck out even slightly. (Even his “opposition” to the Iraq War was trivial: Dick Durbin was voting against the war; there was literally no political cost to opposing the war in Illinois politics).

What tipped me early on to his non-credentials as a progressive fighter for economic justice was when, during an early debate between Democratic candidates for the nomination for Senate in 2003, he lauded a book called The Two Percent Solution. Being curious and interested in this guy who I viscerally identified with at the time–both our dads herded goats in third world countries; funny names; community organizers–I picked up the book, and was a little chagrined.

Now at the time, I was a partisan Democrat who regularly read the Progressive Policy Institute position papers with interest. But even to me then, the book seemed like a sad surrender to “conservative” (really, neoliberal, though I didn’t quite grasp that at the time–I was 22) principles. The author, very smart and well-meaning, looked at the American economy and despaired. To address the systemic problems of the economy, he proposed an anemic set of policy proposals dressed in grandiose language. Essentially, by increasing spending by 2% of GDP, but pouring that money into “free market” programs, we could address all the problems facing society. Nowhere did he propose fundamental changes to our economic, legal, and political regimes that would allow working class Americans to improve their own conditions by improving their ability to bargain with their employers. All the solutions were predicated on the ability of business to get richer while problems were ameliorated.

The mere idea that all of America’s problems–poverty, crime and prisons, the collapse of public education, skyrocketing debt, runaway income inequality–could be solved by begging the wealthy to pour just a tiny bit more into programs that would in turn make them even wealthier is absurd. And that Obama was trumpeting this book as a dog whistle to his corporate supporters made him forever suspect to me. My suspicions have born out.

The “two percent solution” is so perfectly emblematic of the fundamental, structural cowardice of the Democratic Party, terrified to breach the neoliberal consensus and feel the wrath of corporate power. It is just begging the powerful for more, and supposed transformational leaders like Obama are little more than Oliver Twists with eyes down-cast before ladle-wielding corporate beadles.

At this point, by the way, is where neoliberalism truly diverges from libertarianism (and why libertarianism is little more than a useful purity cult that enables neoliberal policy). Where pure libertarians would be aghast at the idea of the state using its coercive power of taxation to fund market-programs meant to help the poor and working class, the neoliberal consensus loves such ideas, because it does nothing to dislodge wealth, but also protects the system from populist rage. Neoliberalism requires state power to come in and protect capitalism from itself, in other words. In that way, it much more cynical than the childish idealism of libertarianism.

The Contradiction Consensus

Neoliberalism has vanquished its foes. What shreds of class politics favoring labor were left in American political discourse have vanished. Today’s “liberals” are in fact neoliberals, and “conservatives” merely more doctrinaire neoliberals; the disagreement is quantitative (“how much tax?”) not qualitative (“do basic legal and economic regimes need changing?”).

For proof that the neoliberal consensus is the only worldview remaining in our politics, we don’t need to delve into policy groups and political statements. Just look at the President. He is baldly a neoliberal; his education policy, trade policies, behavioral posture towards labor, and “two percent solutions” are all neoliberal. And his Republican opposition characterizes these minor differences as constituting “socialism”!

But ironically, without competition neoliberalism will collapse. It doesn’t work; like libertarianism, it is built on sloganeering and abstract concepts reified to make policy arguments.

The profit motive only creates profit, it doesn’t create efficiency, unless efficiency is defined as creation of most profit for least cost. And the economy is not dominated by entrepreneurs, but big firms. Half of Americans are employed by big firms (500+ employees), and small businesses are typically so reliant on big firms for business that they are little more than auxilliaries to them. The largest employers set the standards for employment in an economy, and the hostile labor law regime in America makes collective bargaining at those employers impossible. This is an important point that reflects a debate in evolutionary theory: who is the key actor in the neoliberal framework? They use the word “entrepreneur” and actually believe that we could all be entrepreneurs. But the market’s destructive pressure doesn’t act on the “entrepreneur” it acts on the capitalist, and the capitalist in the modern economy is not a sole entrepreneur but huge firms which can act as near monopsonies in their market sector, the sole important purchaser of goods and services. If you’ve owned a small business, the first thing you learn is who these monopsonists are in your field. What’s worse, they also act in the same capacity in the labor market: they are the sole important purchasers of labor. In evolutionary theory, there is a debate about what level of organization natural selection operates on: the gene? the cell group? the organism? the kin-group? the species? Neoliberal policy makers play a neat of sleight of hand by talking about entrepreneurs and small businesses when, in fact, “selection” in the market happens meaningfully at the level of the largest firms, with all its attendant little species–its suppliers, its employees, its consultants–secondary victims of that selection process (and this comparison ends here–appropriation of biological language by market fundamentalists is among their many distasteful exercises).

The single largest employer, government, will soon no longer have any capacity to guarantee some minimum standards in employment as radical neoliberal governors eliminate collective bargaining there, as well.

But these measures do not lead to more competition, do they? They merely ensure that profit and wealth accrue to an ever-smaller class of Americans who, in turn, use that cash to dominate elections. The Citizens United decision by the Supreme Court ensured that their ability to influence elections will not be curtailed or limited. This class isn’t going to voluntarily relinquish their control over the coercive power of the state. It will simply use that coercive power to perpetuate its class interests, which means greater income inequality, which means more debt, more work for less reward, less economic security.

Among the contradictions inherent in neoliberalism is that it requires more and cheaper labor to provide the material comfort it claims as its benefit, but the source of cheap labor requires maintaining a sometimes violent overseas empire (a fact libertarians recognize), and the material comfort is only short term because most of the Entrepreneurial operators are only concerned with the short term. We provide food cheap, but our food is causing murderous obesity and diabetes. We provide durable goods cheap, but they are of worse quality and have to be replaced constantly (and we have to borrow to buy them, even though we don’t need them). And, most important, we are given more choices to consume, but with income inequality our only choices are consumption choices. The real freedoms that come with economic security–freedom to leave your employer, freedom to not work at all for a time, freedom to travel and move, and even freedom of conscience–degrade as as the drive for ever more accumulation by capital requires degradation of working conditions and increased dependence on the employer by the employee.

Which means, of course, an eventual correction–hopefully not violent–to the system will probably take place. What economic system has lasted forever? We know that at some point there will be a change. What we’ve now learned is that correction cannot come via elections, which are now wholly dominated by corporate power. It will come through direct confrontation of corporate power, through horizontal withholding of consumption (boycotts) and production (strikes).

Progressive and liberal activists have spent literally billions of dollars in cash and just as much or more in free labor to get progressive and liberal reformers (like Obama) elected. What they find is, once elected, these politicians are stovepiped; their range of movement severely curtailed. They are still only able to operate within the narrow range of neoliberal consensus, that profit is the sole moral good.

In other words, when elections don’t ratify the will of corporate power, corporate power neuters those elections. It neuters elections by funding massive, hysterical disinformation campaigns about death panels, it neuters elections by sending literal armies of corporate lobbyists to Washington to destroy financial systems regulation, it neuters elections by consolidating media and setting the terms of the debate. High-profile liberal thinkers mewl and puke about our elected officials being restrained by the magical filibuster, and serve as important apologists for the system, treating each totally expected surrender to corporate power as a surprising setback.

To pour more money or effort into “electing Democrats” is merely marching into the abattoir, alienating and dispiriting idealistic young people by giving them material evidence that their idealism and hard work does not matter.

When the Citizens United decision came down, I praised it, because I felt that it may have been rightfully decided, but also because it merely made a legal fact of something that had already existed. Perhaps with such overt and explicit domination of our political process by corporate power and cash, Americans could finally begin to understand that their problem was not “Republicans” or “Democrats” but wealth unchecked by labor power. By finally seeing this, we could give up on the pathetic endeavor of gearing up every two years with visions of apocalypse if one side or the other doesn’t win, with disingenuous and embarrassing marketing schemes meant to add gravity and meaning to what is essentially a vapid consumer choice.

Republican v. Democrat is no more meaningful than Apple v. PC. Some ease of use, but the same essential product; the choice is more important for what we want to imagine about ourselves (our identity politics) than for the practical result of the choice.

Confronting Corporate Power

Confronting corporate power can take many forms–and the result is not to destroy all corporations or some ridiculous pre-modern concept. It is merely to re-introduce a countervailing force that will set fair values to labor relationships in the work place through freely bargained contracts, rather than relying on state coercion that is operated by one side in the fight.

The more tried-and-true way is strikes, the horizontal withholding of labor. I believe we’ll start to see these pop up, not necessarily organized by the calcified labor movement, but in the form of “wildcat” or spontaneous strikes that through coordination between firms and locations become organized over time.

The new, and tougher, way has to be boycotts, the horizontal withholding of consumption. There is a reason that our President’s first plea to Americans was to keep consuming after September 11th. Even a brief cessation in consumption can have dire consequences for America’s largest firms, which in order to always be accumulating profit are highly leveraged (in essence lending to us to buy from them) and require a constant stream of revenue. Boycotts are extremely difficult to organize, and even harder to sustain once begun. That doesn’t mean that they are impossible.

If even a quarter of Wal-Mart’s consumers withheld consumption for a month, it would cause severe losses and bring the firm begging for resolution. Wal-Mart of course is at the peak; work your way down, and non-consumption (and non-payment in the case of creditors) would so damage the largest firms in the economy that they would be forced to negotiate. The threat to the system itself would, if nothing else, spur actual, meaningful, and structural reforms as “liberal” politicians and their corporate underwriters panic.

Until this confrontation takes place, the left’s activists are just engaging in this heartbreaking bi-annual ritual, like standing at the edge of the sea with mops and rags in hand, as though they can sop up the tide.

One thing’s for sure, if I may quote: like a kid hitting puberty, it’s going get really ugly before it gets pretty.


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