Politics

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Corporate Reckoning

The aftermath of a coup attempt is one of those moments when a nation gets a really serious insight into its values.  Do, for instance, its politicians rally around some higher set of principles, or do they slide quickly back into the day-to-day argy-bargy of political positioning and infighting?

Ours are perilously close to the latter.  And this after their own place of work was invaded and trashed while they hid and cowered in sundry hiding places.  Profiles in courage are few and far between right now within our politics class.

The reason is obvious: one of major political parties is complicit in the ruin of democracy and in the rise of a far right version of populism based on white supremacy, nativism, and grievances of various sorts.  Perhaps this was the inevitable consequence of forty years of false doctrine and anti-social agitation during which the very word government became reviled and scorned by those swept along by that doctrine.  Perhaps it was the inevitable consequence of the highly planned and disciplined attack on democracy orchestrated by the panoply of right wing think tanks and media outlets established during the late 1970s for the specific purpose of ruining the ability of the middle class to protect itself from our oligarchs and big corporate interests.  Or, perhaps, it was simply neglect and complacency on the part of a voter population who bought into the saccharine and sanitized history fed them after World War II — a history in which Americans always wore the white hats and in which the constitution was not a piece of paper to be updated to suit each generation’s context, but which was beyond reproach and beyond amendment.  Is it a coincidence that the last amendment to the constitution came right at the rise to ascendancy of the neoliberal elite?

Our bookstore shelves groan under the weight of recently published screes describing the imminent demise of American democracy.  The topic has become an obsession in leftist circles throughout the country.  These books all purport to describe how democracy ends, and they all target the rise of far right sentiment within the Republican party.

But these books are wrong.

The end of democracy was a long time ago.  It came about when both our political parties succumbed the the false doctrines of extreme thinkers like Hayek and Friedman who both harbored deeply anti-social sentiments draped within a cloak of intellectual righteousness.  The end of democracy began with the publication and circulation of the infamous Powell Memorandum amongst the members of the US Chamber of Commerce.  That terrible, ideologically driven, document became the manifesto of the far right and of its corporate paymasters.  The alliance forged between right wing economists and the corporate sector, which remains solid until today, is a significant aspect of the quiet revolution orchestrated by our oligarchs and supported by the veneer of intellectual rigor provided by economists driven by market sycophancy.

The demise of our middle and working classes was inevitable.  The stagnation of wages was inevitable.  The corruption of our government was inevitable. And the rise of Donald Trump was inevitable.  As was the recently failed coup attempt.

That Powell memorandum set in motion a cascade of capture of the citadels of academia by the false doctrines of Hayek and Friedman.  It encouraged the work of eager academics who were trying to make reputations for themselves rather than pursuing true rigor.  The result was a steady trickle, within the business organization literature, of ideas that sought to cement the libertarian worldview and to supplant the earlier, more nuanced, post-war view.

The rise of this neoliberal order found a welcoming and well funded home in corporate America.  The destruction of the myth of opportunity for all began right there. The blindness of the academic elite that proselytized liberty whilst abetting oligarchy is an astonishing feature of the past forty years.  Still today ardent advocates of whatever it is they describe as liberty fail to see the loss of freedom that their ideas inevitably create.

So, here we are at a point of reckoning.

The decisions made over the next few days and weeks will determine whether America slides further into failed state status, or whether it pulls itself back from the abyss.  Judging by the complete surrender of a large part of the Republican party to anti-social thought, and to their embrace of extreme methods in their attempt to maintain power, the odds of a full recovery are poor.

I have seen commentators talk about the kind of agenda we need to lift ourselves back up.  First, they say, we need to occlude any chance for Trump to will political power in the future.  That is obvious.  He needs to be accused and convicted.  He needs to be banished.  Second, they say, we need to address the long term and deep malaise caused by the neoliberal ideology that has strangled our discourse.  Good.  Let’s begin with economics.  Third, they add although tentatively, we must reform our system of government to protect its values and to make real its claim to be open to all equally.  It never has been open to all: even after the passage of the civil war amendments the reality of racism was allowed to flourish throughout the nation.

I want to add a fourth: we need to revise our relationship with our large corporations.  They are the source of political corruption with their flood of money and lobbying in Washington.  They are the creators of most of our social-economic policies regarding the workplace, work/life balance, affluence, the distribution of wealth, and the pace of technological change.  They play a pivotal political role.  They are major political actors.  Any healthy democracy needs to recognize this fact and regulate accordingly.

Our economy is administered.  It is situated within, and is an artifact of, the rising complexity of life brought about by the steady accumulation of information humanity creates simply by living, interacting, and sustaining itself.  The division of labor long since rendered obsolete any theories dependent upon a simple worldview of individual transactors inhabiting a low information landscape.  Corporations are a necessary feature of the need to administer the mediation of economic activity in a landscape featuring a much more dense information concentration.  We cannot avoid the need for administration.  Business firms housed within the legal shell called a corporation are here to stay.  It is our obligation, and our right, to call them to task for their attack on democracy.

We need corporate reform just as much as we need political reform.

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Under Pressure

I am learning that it takes a while to come to terms with the trauma of an attempted coup.

Various people are reacting differently depending on their state of mind prior to the attempt.  What catches my eye, given my own perspective on the role of business in society, is the pressure emerging on our large corporations.  Having spent the past few years busily ignoring the moral corruption and ineptitude of the Trump regime business leaders are suddenly trying to appear pious.  Many of them are suspending their support for political groups and individuals.  Others are suspending social media platforms that were used to organize insurrection and ferment violence.

This is all too little too late.

The equivocation that allowed major corporations to support Trump whilst overlooking his manifest moral failings simply so that they could benefit from tax cuts and reduced regulation stains those corporations forever.  It is an example of the transactional thinking produced by a rigid application of the flawed notion of shareholder value permeating the business world.

Let’s set the record straight: corporations are wards of the state.  They exist because the state says they can exist.  That’s what obtaining a corporate charter implies.  Actually it is an explicit, not implicit, relationship.  In return for being given a charter a firm, which then becomes a corporation, commits to providing socially beneficial services.  It is a classic example of a state/private sector partnership.  The charter brings with it a variety of benefits available only to corporations.  So as firms accept those privileges they surrender their market purity: they become hybrids, they become agents of the state.

It is the inability of most economists to understand the vital difference between a “firm” and a “corporation” that has bedeviled the development of our understanding of institutions and their role in mediating transactions in the face of radical uncertainty.  Firms and corporations may look similar when viewed through the narrow lens of economics, but they are very different structures with very different consequences for economic development.

This is not the place to opine further on that difference, except to point out to anyone interested, that, as wards of the state, modern corporations are obligated to act socially responsibly.  That includes not funding politicians who advocate violence or who seek to undermine democratic elections.  So acting responsibly is not some amazing attribute of a “woke” corporation.  It is an expected attribute.  It is something we ought to demand.  Indeed: acting otherwise ought to bring with it the potential loss of the charter that is so central to the corporations survival.

This is a moment when getting rid of our muddled thinking about what appear to be arcane definitions of what a “firm” is becomes vital.  We need to shift this discussion out of academia where it is doomed to wallow in endless hair splitting, and get it into a more open domain where we can build pressure on our corporations to be sensitive to the socio-economic consequences of their actions.

Finally: let’s also be clear.  We have for far too long outsourced swathes of socio-economic policy making to the business sector where a transactional attitude born of a false theory has produced a level of inequality, insecurity, and inequity that has undermined the nation and torn its social fabric wide open.

We need to take back into the democratic domain that policy making so that we can all invest in the outcomes.

So it is good that business is under pressure.  It has run free too long.

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January 6, 2021

The crisis lingers on.

One would think, although we are now in an odd world, that abetting, instigating, and applauding an attack on Congress would result in more than a gentle rebuke.  Apparently not.  The wheels of American politics move extremely slowly and the perpetrator of the crime still is hunkered down in the White House bloviating, no doubt, about how he was robbed of his victory in November’s election.  Perhaps there will be enough spine amongst those who were attacked to exact appropriate revenge.  Perhaps not.

For, already, the political calculation that infects everything done in Washington is slowing and possibly preventing prosecution.  The Republican Party, now terrified of its full complicity and concerned about whatever is left of its public image, is doing its utmost to avoid punishing its soon to be ex-leader.

What do we know?

Congress was invaded with the intention of stopping it from performing its Constitutional obligation to recognize, formally, the November election result

The invasion came at the explicit behest of Donald Trump who ordered the mob at his January 6th rally to march on Congress with that aim in mind.

Several of the more extremest members of the mob had been planning various acts of mayhem for several weeks.

That planning had been overt: many of them had spoken, written, and communicated about their intentions for months.

Many others in the mob had simply fallen for the serial lying of Donald Trump or had fallen prey to various conspiracy theories allowed to float freely on social media platforms that think of themselves as above regulatory control.  This group consisted of people from all over America who believed Trump’s lies concerning the election.  They thought he had been robbed.  That he never, not once, produced evidence to support his claim was not enough to stop them joining in the assault.

Adding these facts together we see something as stark is an insurrection or a coup.  America has just survived an attempt to topple its government through the use of violence.

We are thus in a binary condition: either we are for Trump, or we are for the United States of America.  There is no middle ground.  And even those who imagined themselves acting out some patriotic mission to salvage freedom and the election result are part of the treasonous plot.  They are guilty.  Perhaps they are guilty most of monumental gullibility, but once they entered the hall of Congress they became criminals along with Trump himself.

So what to do?

Here we run into the obscurities of the American governance system itself.

Because of the absurdity of the prolonged “lame duck” period between the election and the inauguration of the new president, Donald Trump remains the president and thus the wheels of justice are, technically under his control.  Fortunately, it appears that Trump is not only in hiding, possibly aware of his guilt, but he also seems to have dropped any pretense to governing: he is absent from all discussions.  He has always run from the carnage he has created throughout his life, he has never accepted responsibility for his actions, so we can assume he is trying to stay away from his own coup attempt too.  His absence leaves the reins of American government loosely held by sundry departmental heads, all of whom have suddenly found the urge to cooperate fully with the incoming regime.  It also leaves the Vice President in the lurch, his own political future shot through from all sides: to Trump loyalists he is a traitor; to those supporting the United States of America he is an enabler, or worse, a quisling.

Vice President Pence shares this unenviable situation with whole swathes of our political and business class.

Which side are they on?

For years large numbers of our business elite have overlooked Trump’s manifest racism, misogyny, and other defects because he promised, and delivered, fat tax cuts to enrich them.  He bought their support.  Their moral equivocation now stands out in startling detail.  How could they?  The list of very wealthy Trump supporters who fawned over him whilst he pillaged the economy on their behalf is too long to go into here.  But we must be insistent: whose side are they on now?  How can anyone trust their moral judgment going forward?  How will they make recompense?

Whose side is Steven Schwarzman of the Blackstone Group on?  Trump’s? or America’s?

Ditto, Larry Ellison and Safra Catz of Oracle.

Ditto John Paulson; Marc Rowan; David Duffield; and Peter Theil.

Are they fans of the coup attempt?  Have they spoken out against Trump? If not we know where they stand.  We already know that they value their business interests above their valuation of America.  Have they discovered patriotism yet?

If they do not speak out, forcefully and not in corporate waffle-speak, then their business interests ought suffer.  How can any respectable business transact with people who abet such a crime?

The political class too is now in the spotlight.  Having either tacitly or explicitly supported Trump as he trashed institution after institution, the day of reckoning has arrived.  Which side are they on?  Mitch McConnell: where do you stand?  Fancy speeches on the Senate floor are one thing, but substantive support for concrete action is another.  Take a stand against Trump, or join him.  Those are the only two options you have.

Ditto for Marco Rubio; Tom Cotton; Ben Sasse; and the entire host of Republican contenders for president down the road.  Will they disavow Trump and his mob?  Or will they worm their way around looking for a politically convenient way to avoid roiling that mob?

And what about Fox News and other right wing media?  I doubt there will be much change.  They will wriggle and deflect the blame.  Their commitment to the truth and to the moral high ground will be sorely tested.  Judging by these past few years, there is little reason to imagine a sea-change or any contrition.

But, enough.  The nation has been attacked from within.  The reckoning will take time and will be dangerous.  Given the ability of most people to maintain contradictory mental images simultaneously it is only time that will allow the heat of the moment to dissipate.  Some of the mob will end up in court.  Most will fade back into the woodwork and get on with their lives.  They will continue to harbor loyalty to Trump and his lost cause.  The tempers and feelings he engendered will lurk below the surface and no amount of proof, rectitude, or logic will eliminate the disease.

One last thing: the stark evidence of racism throughout the mob is, perhaps, its most horrifying aspect.  One woman mob member, as she wiped away tear gas from her eyes, proclaimed: “They are supposed to be shooting at BLM, they are not supposed to be shooting at us.  We are patriots. We are on their side”.  This as she broke numerous laws and defiled democracy.  There is no need to parse that statement.  It stands as testimony to the depth to which America is in need of a reckoning and a full accounting for its past.  Perhaps this woman fears that the day of reckoning is here.  Perhaps she thinks that a mob of white people invading the halls of Congress is perfectly allowable.  It doesn’t matter what her justification is.  She is a racist.  Self-declared in her own language.  And she was far from alone: anti-black and anti-Semitic language and paraphernalia were on abundant display.  We do need to waste time wondering whether racism was part of the motivation of the mob.  It most certainly was.

This is a sick nation.  Trump damn near destroyed it.  A generation will be needed to pass away before the stain of January 6th begins to fade.  Under any circumstance the reality of what America is, is fully exposed.  For those who keep repeating “this is not who we are”, I ask you to stop and reflect.  Because this is indeed who we are.

Now we need to fix it.

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Carter on Keynes

The biography of Keynes by Zachary Carter ends on a decidedly wimpy note.  The concluding chapter is devoted to the financial crisis of 2008 and the subsequent half-hearted sort-0f-Keynesian policy response.  Whilst Carter seems fine with his condemnation of neoliberal policies and is clear about the abject failure of the notion that financial markets act in either a self-correcting or a rational manner, he then goes on to ask why Keynesianism has proven to be so politically weak:

“But pointing the finger at neoliberalism raises uncomfortable questions for Keynes and his defenders.  Why has Keynesianism proven to be so politically weak, even among ostensibly liberal political parties and nations?  The Keynesian bargain of peace, equality, and prosperity ought to be irresistible in a democracy.  It has instead been fleeting and fragile.  Keynes believed that democracies slipped into tyranny when they were denied economic sustenance.  Why, then, have so many democracies elected to deny themselves economic sustenance?”

Surely the answer is obvious.  Indeed, the answer is littered throughout the previous pages of Carter’s book.

Neoliberalism as it cohered in the second half of the twentieth century was essentially a reactionary effort to undermine democracy.  Carter himself aptly describes what emerged as a pseudo aristocratic mindset bent on protecting major asset owners, large corporations, and a singular version of personal liberty that allowed space for the co-option of government by those forces in the name of “liberty”, but which disallowed space for government action to protect the collective against those same forces.  In other words “liberty” was available to the powerful who owned the back channels into government and less so to those who relied on government to ameliorate the consequences of the activities of the powerful.

Democracy became a name that papered over a plutocratic reality rather than a fact.  The aristocratic counter-attack that gathered momentum in the 1970s and flourished in the decades since was designed precisely to deny the very sustenance that Carter wonders about.  The Keynesian vision, at least the version Carter describes, was firmly in the aristocratic cross hairs because it implied a focus on equality and a more generously shared prosperity.  It was also a grand philosophical vision, however naive, of a post-scarcity world rather than a technocratic focus on efficiency.  As such it ran counter to the essence of twentieth century corporate ideology with its relentless desire to assert the power of capital over that of labor.  Keynesian thought had to go.

Perhaps a more nuanced response to Carter is that Keynes tried to carve out a middle ground in a century where extremes were the norm.   Caught between the siren songs of fascism and Marxism and with early versions of capitalism apparently crumbling around him, Keynes was impelled to salvage a less extreme world.  This effort forced him to accept the real world around him which is why his economics is riven through with pragmatic acceptance of reality and eschews the fantasy worlds that others have preferred to theorize about.  It’s what makes him a more human and not a glittering prophet.

What comes across as a more vexatious problem is why it was that the economics profession was so eager to abandon this realism and infuse what became the commonly accepted, and thoroughly Americanized,  version of Keynesianism with odd bits of classical thought and misleading policy certainty kluged onto a sanitized Keynesian core.  There appear to be two main explanations:  one was the paranoia of Cold War America where even a faint whiff of collectivism was enough to destroy careers and gain the opprobrium of the elite and the media.  This alone forced many a good Keynes follower into the shadows.  Second was the ambition of people like Samuelson and Solow to re-build economics on a mathematical foundation.  This required re-configuring Keynes in ways that his ideas could not easily be confined.  The resultant version of Keynes, as we all know, is hardly Keynes at all.  Samuelson and his followers expunged the key elements of Keynes and slowly, through each new edition of their works, watered it down to accommodate the aristocratic counter attack.   So, ultimately when the aristocrats won the ideological war for the heart and direction of economics is was largely because the Keynesian side had shriveled into a technocratic shell more akin to a combination of maximizing mathematics and accounting rather than being a clear vision of society.

This is truly unfortunate because the loss of ideas concerning the role of radical uncertainty, complexity, and skepticism concerning equilibrium could all have helped move economics along a realistic path.  This is especially so given the enormous advances subsequently made outside of economics on all those fronts.

Naturally economics had to be battered into submission by the plutocratic elite in order to provide intellectual heft to its need for low wages, shareholder supremacy, unemployment, globalization, deregulation, and so on.  Getting it away from its Keynesian focus on all the attributes Carter lists, and turning it into a modest mathematical justification for all that the elite wished turned out to be less of a struggle than it ought to have been.

So, whereas Carter tries to be profound in asking why Keynesianism crumpled so easily, he is simply re-telling a well worn history.  Economics went wrong because it had to go wrong in order to eliminate a source of opposition to the plutocrats.  Keynesianism was allowed to continue to exist in academia only as long as it was tamed and de-fanged.  The irony is that as economics proclaimed itself as more scientific it was in fact becoming more political.

Re-inventing economics requires, by implication, being ready to recognize its political content.

But that’s not new either.

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Racism in America

I don’t often comment on politics here, but I want to record my thoughts as I watch the extraordinary convulsions running through America at the moment.

First: racism is a basic fact of American life.  It has been apparent to me since I moved here.  White America simply doesn’t want to be forced to engage with it, so it ignores all the plentiful evidence that it exists.  It is too painful and too difficult to deal with, no matter how sympathetic people are, so they want to avoid the topic.  They prefer, instead, to pretend that it is an historic artifact and not a current one.  Worse, when outrage hits the streets, as it has recently, a good proportion of the white population gets upset: they believe that there has been sufficient effort made to heal the breach, and that any current anger is a sign of disrespect for that effort.  They then accuse the black population of being ungrateful for, or of squandering, that effort.

Second: American politics is massively shaped by race.  The entire shift to a more heavily polarized politics in America came about after the deliberate pursuit by the Republican Party under Nixon and Reagan to exploit Southern white racism.  Within years the entire political map was altered: the South became a Republican redoubt built on white anger at the civil rights movement, sentimental recall of the Civil war, and persistent repression of its black population and, especially, its right to vote.  These all exist and flourish today.  Most people point to Nixon as the villain in this, but Reagan was just as bad.  Why else would a Californian governor announce his run for the presidency in the Deep South?

Third: speaking of Reagan.  In the late 1960s a group or armed black men walked into the Californian legislative buildings.  There was no violence, but they were making a point.  They had learned that Californian law allowed someone to carry a gun in public.  They were asserting that right and using it as a way to be equal to their white fellow citizens.  Horrified at the thought of armed black men walking the streets, Reagan who was governor of California at the time, rushed through gun control legislation to eliminate that right.  So his Republican allies were all for gun control when it limited black access to arms.  Compare that with the Republican support of the recent invasion of the Michigan State House by a group of armed white people.  They were, we are told, expressing their constitutional right to bear arms.  Reagan was racist and so, courtesy of the Nixon/Reagan southern strategy, is most of the Republican Party.

Fourth: as a consequence of this, the Republicans are now stuck, mostly willingly, as a party of white people.  Any effort it makes to become more diverse sinks under the weight of the Nixon/Reagan bargain with the South.  This explains the complete silence in the face of Trump’s clear racism, and his appeal to far right extremists.  The modern Republican party is incapable of solving any issue that might mean it has to part company with the far right or the disgruntled white underclass that has been taught to see the black community as a leech on its meager livelihood.

Fifth: a truly sad part of this is that, subsequent to the passing of the civil rights laws in the 1960s, a government commission warned about the reverberation of racism likely to echo in the aftermath of the new laws.  It warned of America falling into two parts.  One white and one black, apart and unequal.  Not just unequal in economic terms, although that is brutally obvious, but apart in terms of opportunity and justice.  If anything the neoliberal era of Reaganism and corporate excess has exacerbated the divide.  America has been falling apart for decades.

Sixth:  it is specious to refer to the constitution in the context of racism and its resolution.  It is a piece of paper of no worth if it is ignored or perverted by Supreme Court opinion.  A good case in point is the 14th amendment meant to protect anyone from bias or infringement on their rights based upon discrimination.  That amendment has a long history of use and application in the Supreme Court.  But that use and application is weighted ten to one or more in order to protect the rights of corporations.  It is rarely used to protect the rights of the black population.

Lastly:  the symbols of racism exist everywhere, but mostly are manifested in the proliferation of reminders of the Civil War in the South.  Every single such reminder, mostly statues of Civil War soldiers or the Confederate flag, are symbols of the struggle to preserve the institutions of racism.  Not only are all those people, and that flag, emblems of traitor hood to the U.S. itself, they are a constant symbol of what that struggle was about: the continuation of slavery.  The current population of the South might wish this were not the case, and they might prefer that the trope of “states rights” was the real issue being fought over, but the reality is that it was slavery their ancestors wanted to defend.  It is hateful ti maintain any illusion otherwise.  These symbols must all go if there is to be any hope of a non-racist future.

I am, sure that others could compile a better of more comprehensive list than this, but tases are the most salient things that come to my mind this morning.

As you all know I am a democrat [with a small”d”] through and through.  It is painful to realize the reality that America is not truly democratic, and that what attachment it has to democracy is under such threat.  To me the fight to end racism is a fight to strengthen democracy.  Americans obsess over their “freedoms”, they tell themselves that they are “exceptional”, and that they live in the land of the free [not realizing that this is an insult to the rest of the free world], but they are not free in any significant way until they face and come to terms with the past.

Don’t brush history under the rug.  Deal with it.   Learn from it.

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