Tag Archives: Capitalism

Post-Midterm Elections Hangover


Did you vote yesterday? I did, even though I knew that my vote would not have an immediate impact on anything, since I live in California and there were no close races on the ballot. I still believe, though, that voting is fundamental, even and especially when you are angry with the only available options. Here’s why.

The majority of commentators on the 2014 U.S. midterm elections have lamented that the electoral system in the U.S. is broken and dysfunctional (and here)  after yet another record-low voter turnout. I strongly disagree. In fact, I would argue, the electoral system is working perfectly well.

“People feel they’re victims of the process, that politics isn’t something to participate in, it’s something that is done to them. The feeling is getting worse, it’s getting much deeper, it’s covering larger and larger groups within the electorate….Their frustration is much worse than anything I’ve heard before,” said a Democratic Party pollster… in 1990! Since then, there have been 48 elections cycles, all of them with more or less low turnouts. If there was any political will to get the population more involved with democracy, don’t you think the results would have been felt by now? But that’s exactly my point: the way the system is set up benefits those in power, therefore they have no incentive to change it.

Remember that the goal of any political system is to maintain power with the elite group in charge of that system. The obvious correlation is that power should not be allowed to devolve to others outside of the elite group. As I’ve discussed before, in 21st century America, the locus of power is with those who control the most capital, whether large corporations, hedge funds or investment bankers.

Ever since the Nixon administration, the U.S. has moved towards a form of capitalocracy. The events of the 60s deeply worried the entrenched elites. For the first time in the history of the U.S. they could see glimpses of what their society would be like if power was allowed to actually trickle down to the people. And they didn’t like what they saw. At all.

So in the last 40 years, there has been a push to favor capital over people in order to not only overturn the concessions given to us in the 60s, but also, and most importantly, to make sure that nothing like the 60s ever happens again. Outsourcing of jobs, the relaxation of numerous banking and finance regulations, the strangling of unions, the demise of our education system, and other similar measures have created very favorable conditions for high returns on capital investments. Not surprisingly, as Thomas Piketty has demonstrated in his Capital in the 21st Century, the rates of return on capital have exploded, while real wages (wages adjusted for inflation) have stagnated in the last 30 years. In other words, while the rich are getting richer, the vast majority of us just toil along.

What does this have to do with these last elections though? While the turnout was abysmal, these midterm elections represented an all-time record in spending! At first glance this seems absurd: both parties (and private donors) spent nearly $4 BILLION on these elections and yet they still couldn’t get most of the population to come out to vote? But that was never their intention! In a society ruled by capital, people are expendable.

The Supreme Court’s “money is speech” decisions paved the way for today’s extremist political landscape. Politicians no longer need to convince undecided people to vote for them based on a rational analysis of their political programs. Instead, whoever can muster the most capital can just sling mud on his/her opponents and drown the airwaves with favorable ads. This achieves a double effect: it turns away moderates from the political arena altogether, and it fires up their base.

In other words, if you’re not a die-hard Republican or Democrat, if you are generally disgusted with all politicians and don’t believe that any change—or hope—can come out of Washington, candidates don’t care about you. They won’t waste their money attempting to coax you to vote for them. And once they are in office, they will not bother addressing any of the issues you stand for. You are completely useless to them, and they will treat you as such.

The only way to revert this trend and give yourself a voice is trough a protest vote, especially if you disagree with both candidates from the main parties. Cast a blank ballot. Or vote for some candidate on the fringes. This sends the strong message that you are in the mix, that you are politically active, that you WILL vote in the next election, so that candidates cannot simply disregard you. It also sends the message that you will not fall for fear-mongering (every Republican campaign) or naive dreams (Obama 2008).

60% of the voting population turning in a blank ballot sends the strong message that the system is indeed broken, that the population cares about the future of its country and will not allow the elites and their interests groups to decide that future for them. But 60% of the population not showing up at polling stations and not casting a vote is not a problem at all for politicians. It simply tells them that the system they designed is working as planned, by keeping those they can’t reach at bay, while allowing their core constituencies to carry the day for them. Is this democracy? No. But the real question is: next time around, will you make your voice heard or will you stay on your couch?


Capitalism vs. Democracy

Capitalism vs. Democracy

A book came out in France a few months ago that sent shock waves through economics and political science circles: Capital in the Twenty-First Century. Author Thomas Piketty makes the seemingly outlandish claim that capitalism is inherently incompatible with democracy. Can this be?

Most Westerners have been indoctrinated their entire lives into believing that capitalism and democracy work hand in hand (for me it was only the last 24 years since I was born in a Communist state). Putting the indoctrination aside for now, let’s take a fresh look at the two notions of Democracy and Capitalism from the “think for yourself” perspective.

Democracy literally means “the rule of the people” or “power of the people.” So in a “real” democracy, the people have the power, that’s pretty simple. When looking at historic examples though, it immediately becomes clear that all of the people can never be included. Depending on the socio-economical and historical circumstances of the day, various democratic systems have excluded children, women, slaves, foreigners, mentally challenged individuals, criminals, etc… from having a say.

Athens during the Golden Age, for example, is sometimes presented as a near-utopian democracy. Well, if you consider a state that excludes nearly 80% of its population from the political process as an example of a vibrant democracy, the bar is set pretty low. A historical survey of democracies will show that the main concern of those in charge of setting up the system is who to exclude and who to include. While the concept of democracy as “power to the people” is a useful tool for indoctrinating the population and getting it to rally behind the regime, shrewd politicians have always been careful not to allow too much power to trickle down to too many independent-thinking people.

Since a utopian democracy is not to be found anywhere in History, we need to look at the level of meaningful political participation as the measure for how efficient a particular democracy is. What do I mean by “meaningful” political participation? I don’t mean simply giving a high percentage of the population the right to vote, or even the percentage of those who do vote. For example for U.S. presidential elections, the average turnout over the last century hovers in the high 50s%. On the face of it, this seems much better than the Athenians’ numbers and it would support, on the surface, the argument that the U.S. has a much higher level of political participation and is therefore a better democracy. But is this participation, as seen in presidential elections, really meaningful?

For example, here in California where I live, my vote has absolutely no bearing on the election result. Whether or not I vote, a Democrat will take the state. If I lived in Alabama, it would be the opposite result, regardless of my vote. In addition, I don’t feel represented by neither party. To push it even further, having lived in a number of democratic systems in Europe with much broader political spectrums, both the Democrats and Republicans look very similar. In many European countries they could safely sit in the Center and even merge, no one would find it strange, as their ideological differences are unremarkable. So, sure, I am allowed to vote in Presidential elections for one of two candidates, neither of whom I support, but my vote doesn’t matter anyway because of the electoral college system. Is this “meaningful” participation? I don’t think so.

If I disagree with the policies of the Government, I have to rely on my representatives and senator to carry my views. But most likely my vote in the elections that put them in power had no bearing either, as gerrymandering has made the majority of districts “safe” in the U.S. It is just another method of insulating those in power from popular pressures.

So under the U.S. democratic system, most of the population has the right to vote (let’s not forget that 1/3 of the people living in the US don’t vote: children, undocumented immigrants, and felons are excluded), but it is only a token right, since the political system has insulated itself from the popular vote.

This is exactly why I use the term “meaningful” participation. I define it as the percentage of the population who has an actual say in policy making. Simply being given the right to vote is not enough.

So let’s go back to the Athens example and compare it to the US version of democracy. Certainly the US compares favorably to it when looking at raw participation numbers. But when digging under the surface, we begin to see why Athenian democracy is still held in such high esteem. For starters the Athenian model was based on direct democracy, not a representative one like here in the U.S. Out of the 30,000 to 60,000 of citizens who were actually allowed to vote, every single one of them was allowed to walk into the Assembly (their version of Congress) and participate in decision making. Every one of them was allowed to have his voice heard. Looked at it from this perspective, the 20% figure of citizen participation in direct decision-making is absolutely bewildering. To compare, in the U.S. today this percentage would be 0.002% if we took into account only elected officials, high-level executive officers and life-time appointed judges, who can all influence policy (I tallied all U.S. representatives [435], senators [100], state senators [about 1,000] and representatives [2510], federal judges [3,294], cabinet members including pres [24]=7,363).

The 0.002% figure though does not take into account the people whose interests the politicians cater to: the business community. And this is where democracy and capitalism interact:  under the U.S. representative model of democracy, the officials in power don’t represent the interest of the “people,” they represent the interests of those who control capital flows.

You probably heard before that the wealthiest 1%  of Americans control over 30% of the wealth in this country. But did you know that the top 10% control over 75% of the wealth? The official ideological line in the U.S. is that it doesn’t matter who controls the wealth for two reasons: because everyone’s vote counts the same (US egalitarian myth) and because everyone who works hard enough can make it big (the American Dream myth).

As far as voting, by now you should seriously question whether your individual vote has any weight at all in the political process. And as far as the rags-to-riches myth, it is simply not feasible for the vast majority of people. Sure there are your Mark Cubans and other wildly successful entrepreneurs who were not born in wealth. But the vast majority of the top 10%, and virtually the unanimity of the top 1%, was born into wealth. And this only makes sense: under a capitalist system, the more capital you control, the more capital you can acquire. Regardless of what the feel good/ self-help literature is telling you, it takes money to make REAL money. Of course a hard-working individual with 0 resources can make enough money for him and his family to live at ease, even luxuriously. But that is not the kind of money that matters when it comes to having a say in decision making at the societal level.

The role of ANY political system is to divest resources from the general population towards the elite group. The only difference between various systems is in how the elite group is defined, who is allowed in, and its permeability.

What I am getting at is that the undemocratic nature of the U.S. political system is not “natural,” it is not the only alternative possible. However, it is a natural outgrowth of the political organization of this country in the 18th century. Remember the Founding Fathers: they were not ordinary citizens, they were part of the socio-economic elite of their time: “Almost all of them were well-educated men of means who were dominant in their communities and states.”

They were the ones controlling capital in 18th century America. Therefore, it only makes sense that they set up the country in the way that best served their interests. That is what every political elite has always done, throughout History. And one of their main interests was not to allow the general population a say in politics, which could potentially lead to a divestment of important resources allocated to their group.

Of course, because of the huge imbalance in sheer numbers between the elite group and the rest of the population, the average people need to be kept in line, or all hell could break loose. Under authoritarian regimes, this is done mainly by force and somewhat through ideology (while ideological indoctrination is heavily handed in authoritarian states, the level of internalization by the population is never very high; in other words people understand they have to act in certain accepted ways and speak in certain accepted terms, but most of them only pay lip-service to ideology, they don’t actually believe it). In a democracy, this is done mainly through ideology, while the use of force is more covert (by the way, if you don’t think that the U.S. has used force against its own people, I would recommend you read up on the FBI’s Operation COINTELPRO from the FBI’s own website!!!!!). As long as they can lead you to believe that your vote counts, that the U.S. is a beacon of light among the nations of the world who supports Human Rights around the globe and who fights for individual freedoms worldwide, you are way more indoctrinated than any citizen of the former-USSR ever was.

In conclusion, under a capitalist economic system, “real” democracy cannot be achieved. By definition, the economic model favors those who can accumulate vast quantities of capital. Because the supply of capital is not infinite, by concentrating it, fewer and fewer people have access to it. Those who are able to successfully accumulate it over time become the elite. They will then fight tooth and nail in order to create and/or maintain ideal conditions for their continuing accumulation of capital. And the number one condition is to keep power concentrated in their hands, in order to be able to influence all other factors in the equation. Since in the long term “soft” control has proved much more adequate than control by force, democracy is the political system of choice for capitalists. It has nothing to do with the “rule of the people” and everything to do with the rule of money.

In the final analysis I don’t believe that simply because we call our system “democratic” we live in a Democracy in the true sense of the word, just like no one would argue that the Socialist Democratic People’s Republic of Korea (also known as North Korea) is a democracy or a people’s republic. Rather we live in a “capitalocracy” and that is a scary thought.