Friday, April 6, 2012

"A republic. If you can keep it."

An oft-repeated story about the formation of the American republic was that soon after the Constitutional Convention concluded, a lady asked Benjamin Franklin, "Well, Doctor, what form of government will we have?"

Franklin replied, "A republic. If you can keep it."

Franklin's reply is full of portent for what we face today, as the working class lays shattered, the middle class is increasingly pressed, and American oligarchs deploy the full muscle of the "income defense industry" to maintain this status quo of disequilibrium.

Oligarchy and Democracy
by Jeffrey A. Winters

It is a confounding moment in American political history. On the one hand, evidence of democratic possibilities is undeniable. In 2008, millions of Americans helped catapult a man of half-African descent into the White House long before observers thought the nation was “ready.” Democratic movements have won major victories in recent decades, spreading civil rights, improving the status of women and ending unpopular wars. This is the continuation of a trend with deep roots in American history, reaching back at least to the Jacksonian era, of extending the equality principle into American culture at large.

On the other hand, democracy appears chronically dysfunctional when it comes to policies that impinge on the rich. Despite polls consistently showing that large majorities favor increasing taxes on the wealthiest Americans, policy has been moving for decades in the opposite direction. Reduced taxes on the ultra-rich and the corporations and banks they dominate have shifted fiscal burdens downward even as they have strained the government’s capacity to maintain infrastructure, provide relief to children and the poor, and assist the elderly.

Everyone is by now aware of the staggering shift in fortunes upward favoring the wealthy. Less well understood is that this rising inequality is not the result of something economically rational, such as a surge in productivity or value-added contributions from financiers and hedge-fund CEOs, but is rather a direct reflection of redistributive policies that have helped the richest get richer.

Such outcomes are inexplicable on standard, commonly understood democratic grounds. The tiny proportion of wealthy actors among eligible voters cannot account for the immense political firepower needed to keep winning these policy victories. While motivated and mobilized minorities—those organized over issues like gay marriage, for example—can sometimes win legislative victories despite broad opposition from the electorate, America’s ultra-rich all together could barely fill a large sports stadium. They never assemble for rallies or marches, sign petitions, or mount Facebook or Twitter campaigns. So how do they so consistently get their way?

One increasingly popular answer is that America is an oligarchy rather than a democracy.1 The complex truth, however, is that the American political economy is both an oligarchy and a democracy; the challenge is to understand how these two political forms can coexist in a single system. Sorting out this duality begins with a recognition of the different kinds of power involved in each realm. Oligarchy rests on the concentration of material power, democracy on the dispersion of non-material power. The American system, like many others, pits a few with money power against the many with participation power.

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An important snippet:

One might counter that despite these yawning asymmetries at the individual level, average citizens with a modest MPI of one can still muster the overwhelming power of their numbers in a democracy if they band together and pool their material resources, say, to vote for candidates favoring large social welfare programs. But poverty by itself neither motivates nor provides a core set of common interests for the poor the way wealth does for the rich. The presence of wealth focuses the political attention of the rich on wealth defense; its absence has no parallel effect on the poor or those of middling or lower than middling income. Wealth is inherently empowering and motivating; poverty is neither.

Thus, for the many to exercise their collective material power in a manner oligarchs can while operating solo, they must first be actively networked and coordinated and then remain in this state of mobilization over extended periods. This inverts the common argument that oligarchs are only potent politically if they form associations or conspire. In fact, the reverse is true. The vast majority of citizens exert very little concerted material power in politics. But a small number of individuals each have at their disposal the resources it would take tens of thousands of their fellow Americans acting in sustained coordination to match.

A final and daunting aspect of wealth’s power is that it buys armies of skilled professionals, not least lawyers and accountants, to pursue the core political and social interests of the rich. These intermediaries render the political engagement of oligarchs more indirect, obscure their power from view, and shield them from scrutiny and accountability.

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