Oligarchy? Or Kleptocracy? You decide! (3)
The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.
In fact, although their ideas do rule our world, such economists are not defunct, and they didn't do their damage "a few years back." Rather, they're very much alive*, in power, and still making policy. Johnson writes:
Just as we have the world’s most advanced economy, military, and technology, we also have its most advanced oligarchy.
In a primitive political system, power is transmitted through violence, or the threat of violence: military coups, private militias, and so on. In a less primitive system more typical of emerging markets, power is transmitted via money: bribes, kickbacks, and offshore bank accounts. Although lobbying and campaign contributions certainly play major roles in the American political system, old-fashioned corruption—envelopes stuffed with $100 bills—is probably a sideshow today, Jack Abramoff notwithstanding.
Instead, the American financial industry gained political power by amassing a kind of cultural capital—a belief system. Once, perhaps, what was good for General Motors was good for the country. Over the past decade, the attitude took hold that what was good for Wall Street was good for the country. The banking-and-securities industry has become one of the top contributors to political campaigns, but at the peak of its influence, it did not have to buy favors the way, for example, the tobacco companies or military contractors might have to. Instead, it benefited from the fact that Washington insiders already believed that large financial institutions and free-flowing capital markets were crucial to America’s position in the world. ...
A whole generation of policy makers has been mesmerized by Wall Street, always and utterly convinced that whatever the banks said was true. Alan Greenspan’s pronouncements in favor of unregulated financial markets are well known. Yet Greenspan was hardly alone. This is what Ben Bernanke, the man who succeeded him, said in 2006: “The management of market risk and credit risk has become increasingly sophisticated. … Banking organizations of all sizes have made substantial strides over the past two decades in their ability to measure and manage risks.”
Of course, this was mostly an illusion. Regulators, legislators, and academics almost all assumed that the managers of these banks knew what they were doing. In retrospect, they didn’t. ... To date, the U.S. government, in an effort to rescue [AIG], has committed about $180 billion in investments and loans to cover losses that AIG’s sophisticated risk modeling had said were virtually impossible.
And so on. Now, thinking back to Stirlings three divisions of the left:
1. The Finance Left accepts all this without question. "Of course we need "entitlement reform.?
2. The Labor Left accepts the intellectual framework, but seeks to mitigate it. "Of course we can't simply abolish the insurance companies."
3. The Pioneer left doesn't accept any of this, and that's why it's marginalized. But changes happens at the margins -- at the frontier. And that, dear reader, is why you are reading Corrente -- even if, or exactly because, we say Fuck.
That said, there's plenty of food for thought in Johnson's article. Read, ponder, and critique. For example, I don't imagine that turning the banks into regulated public utilities, let alone abolishing corporate personhood, are on Johnson's policy horizon. They should be -- along with legalizing marijuana growing.
NOTE * If you call being a zombie alive.