From Can Democracy Survive Global Capitalism? Robert Kuttner. 2018. Kindle online sample. Section 2.
Our deeper story is about the fraught relationship between socially bearable capitalism and robust democracy.
WHEN THE SYSTEM IS IN BALANCE, STRONG DEMOCRACY TEMPERS MARKET FORCES for the general good, in turn reinforcing democratic legitimacy.
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Democracy must be national because the polity is national.
As a citizen of the United States, I can vote for my leaders.
My government has certain rules and procedures that are relatively transparent and can be contested.
But there is no global government and no global citizenship.
TO THE EXTENT DEMOCRACY REQUIRES TAMING OF THE MARKET, GLOBALIZATION WEAKENS THAT ENDEAVOR.
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Today’s globalization undermines national regulatory authority.
There is no global lender of last resort, no global financial supervisor, no global antitrust authority, no global tax collector, no global labor relations board, no global entity to enforce democratic rights or broker social contracts.
Quasi-governmental global organizations, like the International Monetary Fund and the World Trade Organization, are far less transparent and less accountable than their domestic public counterparts, and easier for corporate elites to capture and dominate.
GLOBALIZATION TENDS TO ALTER THE POLITICAL DISTRIBUTION OF POWER DOMESTICALLY, AND TO INCREASE THE INFLUENCE OF ELITES who favor more laissez-faire and more globalization, so the process feeds on itself.
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A KEY ASPECT OF THE POST-WORLD WAR II SYSTEM WAS THE VERY TIGHT REGULATION OF FINANCE, which remained mostly private but was turned into something close to a public utility.
Uniquely in the history of industrial capitalism, the ability of private finance to operate globally was tightly limited.
The system constrained international movements of capital.
Banks, for the most part, could not do business outside the borders of their home countries.
There was no speculation in currencies because exchange rates were fixed.
Entire categories of financial products that operate globally today and thus add to the system’s ungovernability and instability, such as credit default swaps, did not exist.
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The tight national controls on financial capital had significant consequences for the broader political economy of the era.
In the real economy, finance was the servant, not the master.
Interest rates could be kept low, providing cheap capital to the real economy, without the worry that easy money would fuel speculation, instability, and investment bubbles.
WITH STRICT LIMITS ON WHAT FINANCE COULD DO, THE WEALTH AND POWER OF FINANCIAL ELITES WERE ALSO CONSTRAINED, reinforcing the power shift that undergirded the entire social compact.
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The unraveling of the several elements of the postwar social settlement had multiple sources.
“Globalization” in the current usage—meaning deregulation of constraints on transnational movements of money, products, services, and labor—was not the only element.
But it was clearly a driver and an intensifier.
Globalization was a key vector in the transmission of neoliberal policies and values.
New global rules not only restored the ability of finance to operate speculatively across national borders, but UNDERMINED THE CAPACITY OF NATIONAL GOVERNMENTS TO REGULATE FINANCE.
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Globalization helped to restore the temporarily suppressed political power of corporate and financial elites, as well as their wealth.
Globalization of capital created a reality, even for left-of-center governments, in which there seemed to be no alternative, as Margaret Thatcher famously put it, to even more laissez-faire, because of the need to reassure markets.
The process was cumulative, both politically and economically.
The fact the far-right backlash is occurring in nearly all Western nations at the same time is no coincidence, nor is it accidental contagion.
BACKLASH IS A COMMON REACTION AGAINST THE IMPACT OF GLOBALIZATION ON THE LIVELIHOODS OF ORDINARY PEOPLE.
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The resulting sentiments produce a politics that is sullen, resentful, and perverse, further undermining democracy.
WITH GLOBALIZATION ELITES HAVE WON THE POLICY DEBATES BUT HAVE LOST THE CITIZENRY.
Far-right sentiments are always lurking around the fringes of society, but when democracy does a good job of managing capitalism, they remain at the fringe.
When capitalism overwhelms democracy, we get the alt-right with a friend in the White House.
We get Breitbart News, Stephen Bannon, and Donald Trump.
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Globalized capitalism, increasingly deregulated and unmoored from national restraints, undermines a balanced economy in multiple, complex, and cumulative ways.
With global markets and no global standards, DOMESTIC WORKERS ARE THROWN INTO DIRECT COMPETITION WITH MORE DESPERATE OVERSEAS WORKERS.
A century’s worth of democratic struggles to regulate labor standards are hosed away.
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At the other end of the wealth spectrum, the worldwide liberation of finance creates astronomical incomes for the elite.
The developing world gains access to world markets but, for the most part, becomes an even more extreme case of wealth and poverty.
MONEY BECOMES MORE POWERFUL THAN CITIZENSHIP, CORRUPTING BOTH THE POLITY AND THE ECONOMY.
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Globalization also accelerates cross-border movements of people.
CORPORATE LEADERS AND THEIR POLITICAL ALLIES HAVE PROMOTED INTERNATIONAL FLOWS OF CHEAP LABOR.
Migrants, often poor and often scorned, are outside national social contracts.
They are nonparticipants in national democratic deliberation, and vulnerable to both exploitation and retribution.
Even before recent terrorist attacks, their presence undermined settled social compromises.
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In the EU, neoliberal rules have constrained policy options for member governments.
The rise of far-right antisystem parties has narrowed the parliamentary space of the mainstream, necessitating weak coalition governments of center-right and center-left parties, LEADING TO FEEBLE COMPROMISE POLICIES AT A TIME WHEN ECONOMIC STAGNATION REQUIRES STRONGER REMEDIES.
This blockage, also reminiscent of the 1920s, discredits government and invites Caesarism.
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Some have argued capitalism promotes democracy, because of common norms of transparency, rule of law, and free competition for markets, for ideas, for votes.
In some idealized world, capitalism may enhance democracy, but IN THE HISTORY OF THE WEST, DEMOCRACY HAS EXPANDED BY LIMITING THE POWER OF CAPITALISTS.
When that project fails, dark forces are often unleashed.
In the twentieth century, capitalism coexisted nicely with dictatorships, which conveniently create friendly business climates and repress independent worker organizations.
Western capitalists have enriched and propped up third-world despots who crush local democracy.
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Hitler had a nice understanding with German corporations and bankers, who thrived until the unfortunate miscalculation of World War II.
Communist China works hand in glove with its capitalist business partners to destroy free trade unions and to preserve the political monopoly of the Party.
Vladimir Putin presides over a rigged brand of capitalism and governs in harmony with kleptocrats.
WHEN PUSH COMES TO SHOVE, THE STORY CAPITALISM AND DEMOCRACY ARE NATURAL COMPLEMENTS IS A MYTH.
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The CORPORATE ELITISTS ARE HAPPY TO MAKE A SEPARATE PEACE WITH DICTATORS—and short of that, to narrow the domain of civic deliberation even in democracies.
After Trump’s election, we saw corporations standing up for immigrants and saluting the happy rainbow of identity politics, but corporations lined up to back Trump’s program of gutting taxes and regulation.
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Not a single large company has resisted the broad right-wing assault on democracy that began long before Trump, and all have been happy with the dismantling of regulation.
IF DEMOCRACY IS REVIVED, THE MOVEMENT WILL COME FROM EMPOWERED CITIZENS, NOT FROM CORPORATIONS.
A line attributed to Mark Twain holds that history doesn’t repeat, but sometimes it rhymes.
The current rhyme is a discordant one, with echoes that should be treated as ominous warnings.
(end of section 2)
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Section 2:
“When the system is in balance, strong democracy tempers market forces.”
So far the theme of this book seems to be to strengthen democracy we need more government control and less capitalism freedom.
...
“With globalization elites have won the policy debates but have lost the citizenry.”
This author lists many problems and has many questions but no answers except voting in Democrats and voting out Republicans.
Building a thick and strong wall around the U.S. is not the answer.
Globalization is the answer and will continue, the question be how best to proceed.
Freer markets have the same effects as advancing technology:
-more, better, and less expensive products produced
-some current jobs are eliminated but many more future jobs are created
However, politicians know only current voters can vote for them.
We in Indiana don’t care if we have a trade deficit with Illinois and we in the U.S. shouldn’t care if we have a trade deficit with Japan.
How best to proceed? – Very quickly.
We must start with the U.S. dropping all restrictions on imports from other countries including China, just as there are no restrictions between Indiana and Illinois.
· we in the U.S. will instantly double personal wealth and incomes, the slope in Figure 1 will become even steeper
· all other countries will be forced to soon follow
· shapeless-form monopolist gangster leaders in China, Russia, North Korea, and everywhere will be done and gone
Need peoples' simplicity of game-changing Rubric Cube not elites' complicity of game-playing Rubik’s Cube.
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