The Ultimate Cold War

"I don't want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub." Grover Norquist

Humanity, since the rise of civilization, has been dominated primarily by political and religious institutions. Gradually a third major institution began to emerge, initially with vastly expanded trade resulting from Europe's Age of Exploration, then increasingly with the Industrial Revolution and now with highly integrated transnational global corporations. While, by the 18^th century it was common for European monarchs to turn to bankers such as the Rothschilds to finance their wars, the political power remained the province of the monarch.

In the early United States corporations were often viewed with suspicion because of their history in the establishment of a number of the colonies. The history of settling colonies with indentured servants, of misleading the poor of Europe to induce migration to the colonies and their remote control by English investors, all contributed to this distrust. As a result corporations were authorized for specific purposes, e.g. building roads or canals, and were sunsetted when the project was finished. The Civil War saw a vast expansion of the corporation to meet the demands of that war, especially in the building of railroads. After the war the building of the transcontinental railroad and a plethora of others, placed the corporation, as an institution, as a firm feature of the American economy. Indeed, it was a law suit between the Southern Pacific railroad company and Santa Clara County California, by way of a clerk of the court's titling of a case, that first introduced the notion that corporations were persons. Upton Sinclair's novel, The Octopus, dealt with the stranglehold the railroads had on California politics.

The Progressive movement of the late 19^th and early 20^th centuries was largely a political reaction to these new corporate kids on the power block. The revolt against the excessive freight rates these increasingly monopolistic railroads charged became a focus of the Grange and other progressive agricultural groups. Geographically, where we had progressivism then, the Midwest and the South, we now have conservatism. Could the vast increase in corporate farming have anything to do with this change?

The Muckrakers like Ida M. Tarbell whose detailing of the economic practices of John D. Rockefeller in her book History of the Standard Oil Company, revealed the corporate world of interlocking directorates. These directorates facilitated the corporate response to regulations and other common objectives.

All this economic activity engendered the rise of mammoth financial corporations such as that of J. P. Morgan who became so powerful that he, along with other financiers, hatched a foiled plot to overthrow the government of FDR by force shortly after he became president. In effect, the corporation had arrived as the third major force in humanity's organized life.

Following World War II the corporation became an increasingly global entity as a result of its fundamental requirement to grow. It is now beginning to challenge government, the last frontier for growth other than religion. Whether it seeks to privatize this institution for profit is yet to be seen, but it poses an interesting question.

In dealing with government or, as some prefer, the state, corporations have sought to control the state rather than directly administer it. Mussolini made clear that Italy under his governance operated in the interests of corporations. Recently the Chinese Ambassador asked a group of American economists to meet with him at his Embassy to discuss, as he put it, "Now that free market capitalism has failed what do you think of state capitalism?" In state capitalism the state sets the economic agenda by either owning major corporations (this happened briefly in this country when the U.S. government took over General Motors) or the state owns a controlling interest in the corporation. It will be interesting to see if, over time, the state succumbs to the corporation due in part to the fact that corporations are generally much more flexible the political units. Their governing boards may see opportunities for growth too tempting to neglect.

Corporations are single-mindedly focused on profit and it is imperative that they grow or they will perish. They, therefore, do not have to weigh as many factors in reaching their decisions as do governments, which is why China's government control of its capitalist economy is finding success while the Soviet Union's government controlled economy did not. As global capitalism seeks ever greater markets and merges into ever greater economic organizations with ever fewer people making the decisions, the corporation can outperform any government, which is why government is society's last defense against corporate takeover of the global economy. In my judgment, one need only ask why major transnational and global corporations meet annually in the Davos World Economic Forum or the G8 or G20 have their frequent summits. These are little more than meetings at which corporate interests are the focus.

The World Social Form, deliberately created as the people's offset to the corporate World Economic Forum, is attended by a relatively chaotic mass of multicultural humanity. The emphasis is on improving human life. This differs starkly from the relatively few, but powerful by invitation only, attendees at Davos. One need only compare these gatherings to see the dimensions of the struggle humanity is faced with as it seeks to deal with the enormous power that its collective brain has created, but which that collective brain has failed to control. We want to retain our humanity, but we continue to create a world hostile to that desire.

There are some proposed alternatives to the above scenario.

David Korten in his book Agenda for a New Economy recognizes the fundamental inadequacy of our current free market model, especially the deleterious effect of what he calls phantom wealth, that is, wealth that is detached from real objects and services. This is the immense wealth of the major financial institutions and of the wealthiest among us. One of his remedies is to tax this kind of wealth until it does not exist or is reduced to ineffectiveness. He also makes a case for smaller regional economies rather than national or global ones. His remains a capitalist economy, but highly regulated to generate an economy measured by values such as health, degree of education, elimination of poverty, etc., not by money.

Joe Stiglitz, a former director of the World Bank, in his book Making Globalizaatio Work, while fully cognizant of the profound failures of free market globalization, believes globalization can and must be made to work for human benefit.

Chris Hedges, former head of the New York Times Middle East Bureau and now prolific author on the sad, self-destructive nature of much of modern culture, has declared that he is now a socialist. Some of the best writing on the current social catastrophes that our economic and social practices are generating is being done bye socialists, notably Mike Davis' Planet of the Slums and Eric Hobsbawn's Age of Extremes. If and as I feel I have these adequately in hand, I may be able to expand on the matters addressed in this post.

Bob Newhard

The Return of the Ideologues

If you search Google for "Age of Ideology" or some variant thereof you will find that the vast majority of results deal with the ideological struggles of the 19^th and early 20^th centuries. I would argue that with the election of Ronald Reagan this country entered a new Age of Ideology, at least in so far as the Republican Party is concerned. What follows are but two examples of this now 21^st century phenomenon.

Each year when Supreme Court Justice Clarence Thomas gets a new batch of court clerks, he invites them to his home for a showing of the movie The Fountainhead, a film rendition of Ayn Rand's novel of the same title. In the novel, Rand, the founder of Libertarianism, pits the architect Howard Roark against the elected officials, who find the building they commissioned too modern for their traditionalist tastes. The officials eventually succeed in subverting Roark's creation to a more traditional building, which Roark eventually blows up in esthetic revenge. This was Rand's first successful novel and reflected her repeated theme of the creative individual against the collective society. Rand, a native born Russian, had given a 20^th century voice to American individualism and it has come home to roost with a vengeance.

Notably, Rand chose an architect as her protagonist. An architect is said to be an artist whose art form is buildings. This being the case, the architect must inevitably use other people's money to create her/his art. The logic of Rand's novel is that society should be put at the disposal of its great creators. (In our money-dominated society the great creators inevitably became the corporate honchos.) Art, it must be observed, is arbitrary at its core. It is the vision of the artist and is not subject to any test other than that its creator imposes. This is one of the reasons that art is a lousy metaphor for societal leadership. It must eventuate in dictatorship if the artist as politician is to realize her/his vision. This is, in effect, what Plato argued for 2,500 years earlier when he proposed that the state be governed by a philosopher king. Will we never learn! The only significant difference is that Rand has the additional problem of what happens when talent and ability arise in more than one person, not to mention hundreds or thousands. Presumably you have the battle of the titans in which the mass of mankind suffer.

I first read The Fountainhead in my 20s and was suitably impressed with Roark's valiant efforts to realize his dream and the dead weight of those representing society who sought to suppress it. I eventually worked out the implied scenario, especially after reading Nietzsche. I find it appalling that a Supreme Court Justice should think that this piece of romanticism has anything to do with governance in one of the world's most powerful countries.

Alan Greenspan, our erstwhile Chairman of the Federal Reserve Board, is another Libertarian disciple of Ayn Rand. Reflecting the tutelage of Rand and the economist Milton Friedman, who taught that the market was always self-correcting if left to itself, Greenspan said he was "shocked" by the recession caused by the securitization of fragmented mortgages, which he admitted he did not understand. This is the expression of an ideologue or, as Eric Hoffer said for the Communist mentality, a "true believer." That ideologues can rise to such positions of power and influence in our erstwhile democracy betrays the political naiveté of its populace, especially its inability to deal with incessant propaganda.

One of the most dangerous aspects of an ideology is its resistance to change. The real world is subject to continuous change and in these times of coalescing megatrends demanding concerted action from an extremely fractious global population, the last thing we need is rule by ideologues. This, however, is what we will have if humanity cannot get a grip on itself. Most modern tyrannies have arisen out of social chaos. Our future will be no different unless those concerned with society both for itself, and as a vehicle to enable humanity to deal effectively with its future, become vigorous, numerous and, dare I say it, creative enough to persuade humanity that it is one at root and that its only chance for survival is to respond to our immense challenges not as nations, not as races, not as religions, not as cultures, but as a species.

As I was writing this, President Obama announced his willingness to put Social Security and Medicare on the bargaining table in an effort to get Republican support for raising the U. S. debt ceiling, something the Republicans did seven times During G. W. Bush's administration. That a Democratic president would offer up Social Security and Medicare for any kind of political deal would have been unthinkable before the Democrats began to cave after Reagan's election. What Obama is dealing with, and he surely knows it, is the politics of ideologues. Ideologues who care nothing for human welfare or any other societal requirement except their ideology, which in this case comes down to no government at all unless absolutely necessary. Grover Norquist, the Republican no-tax godfather, is now arguing that any increase in governmental revenue should be regarded as a tax and so is to be avoided. He infamously stated that he wished to see government small enough so he could drown it in a bathtub. When Obama first announced, after his election, that he intended to "reach out" to Republicans, he betrayed a naiveté belying his education, intelligence and political experience or, more likely, his intention to accommodate the wealthy, especially their corporations. These were the people who did not shy from bringing the Federal Government to its knees by denying it all funding, as Newt Gingrich did. These were the Republicans that did not hesitate to lie, big time, to the American people about the non-existent threat that Iraq posed to this country. The magnitude of the lie can be grasped when one recalls that G. W. Bush immediately declared "this is war" in response to the 9-11 Twin Towers attack. It was "war" because these ideologues, as exposed by a plan concocted by Cheney and others in the 1990's, were looking for a pretext to launch the New American Empire.

Obama could have dealt with these ideologues by proposing a Tobin tax on the securities transactions of the very wealthy, which the European Union is now considering and which it projects will raise 200 billion euros annually. This transaction tax is analogous to the sales tax we pay on our purchases, except it is applied to the buying and selling of investment transactions, e.g. the millions of daily currency differential trading transactions. Had this been done and the radical economic unfairness aggressively revealed to the public the Republicans and their constituency of wealth would have been the objects of popular scorn as they were during FDR's New Deal. To appreciate what Obama had to work with consider the People's Budget of the House Progressive Caucasus at http://grijalva.house.gov/uploads/The%20CPC%20FY2012%20Budget.pdf In the end, as events of the Arab Spring again evidence, the only antidote to the arrogance of excessive wealth is popular resistance.

Bob Newhard