Citizen Action Monitor

How capitalism creates an extraordinarily corrupt and extraordinarily undemocratic political economy

We have raging stagnation, monopoly, inequality – That’s real world capitalism, a complete full frontal assault on democracy.

No 1562 Posted by fw, January 11, 2016

“…when you have a stagnating capitalism, like we do, with very low growth rates, that what will happen over time is that as that income inequality grows, increasingly those at the top will be from inherited wealth. That we’re in the process now of seeing the great wealth that dominates our societies increasingly going to be of the inherited variety…. So a combination – we have great stagnation too. So we have stagnation, monopoly, inequality. All raging. That’s real world capitalism. That’s where we’re living it, right now. And when you add that all together, what you have is nothing short of a complete full frontal assault on any reasonable notion of democracy, or self-governance that could possibly exist.”Robert McChesney

In a 2014 public address, Robert McChesney, professor at the University of Illinois specializing in the role media plays in democratic and capitalist societies, spoke at length about how capitalism is turning the Internet against democracy. The 82-minute video-recorded talk is based on his book: Digital Disconnect: How Capitalism Is Turning the Internet Against Democracy

An academic reviewer wrote this about McChesney’s book:

The masterfully researched and engaging text is a stinging indictment of actually existing capitalism’s influence on press freedom and democratic life in the United States. Blending historiography with critical theory, political economy with media studies, Digital Disconnect argues that American capitalism has leveraged the Internet to undermine and weaken democracy, just as it did with the communication technologies of the 20th century. Yet, McChesney argues, there is still some hope—we are in the midst of a critical juncture, and “battles over the Internet are of central importance for all those seeking to build a better society.”

I was drawn to McChesney’s video-recorded presentation solely because he opened with a summary of the basics of capitalism: exactly what I was looking for, for a piece that I intend to write and submit in response to the government of Canada’s invitation to provide feedback on the TPP treaty – the point being, the merits of the treaty cannot be assessed in a political economic vacuum; it must be examined in the context of a failing capitalist system.

Below is an embedded video of McChesney’s full talk and Q&A, followed by my transcript of a 10-minute segment on the basics of capitalism.

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Digital Disconnect: How Capitalism is Turning the Internet Against Democracy by Robert McChesney, video published May 3, 2014

The transcript begins with McChesney’s opening sentence, then skips to the 2:12-minute mark, ending at 10:24.

MY ABRIDGED TRANSCRIPT

Digital Disconnect, the book that I’m going to talk about tonight is about – the subtitle really sort of tells you what the book’s about – How capitalism has turned the Internet against democracy.

Skip to the 2:12-minute mark

Capitalism is missing in action from most books on the Internet

But when I look at the range of literature of books that I wanted to be in the group with, what was striking to me was how capitalism was sort of missing in action in all these books. It just simply wasn’t there. And that struck me as awfully peculiar, that you could write about something like the Internet – or anything, really, but especially the Internet — and lay off capitalism. I mean it just, it’s incomprehensible to me. And that was really my intro, my way into the book.

When capitalism is included, it’s presented as a sort of classroom fantasy

At worst, in these books, capitalism assumes the form of the sort of what I call the ‘catechism’. It becomes this sort of classroom fantasy capitalism of little guy entrepreneurs competing to serve consumers, you know, serving their communities and capitalism, little markets that we hear about. And that’s sort of this vision, this utopian capitalism. There’s a lot of that in Internet’s talk.

Some believe the Internet has magical powers to green capitalism, humanize it, socialize it

Then there’s also the best stuff probably is the stuff that understands that an existing capitalism is deeply flawed, but it thinks the Internet has some sort of magical powers to convert capitalism into like green capitalism, or quasi-democratic socialism capitalism – a different type of capitalism; a more humane, low decentralized capitalism; not with any evidence to back up those claims ever, but with sort of a nice sort of fairy tale that people like.

Generally, capitalism is simply taken as a given; it’s just there, benign

Generally, though, capitalism is just taken as a given, It’s just there. It’s like the Rocky Mountain range. You drive from here to California, you’re going through the Rockies, so why would anyone write a book about — wouldn’t Colorado be nice without the Rockies; it’s going to be there no matter what. And that’s how people regard capitalism; it’s our Rocky Mountain range. Maybe a hundred million years from now geological change will happen that will eliminate them, but for the relevant range of our species, it’s here.

However, the Internet can only be understood in terms of its relationship to capitalism

And I think that’s really a preposterous approach to capitalism. I think it’s probably in its most dubious position as an institution in a very long time right now. And that will continue into the future. And that the Internet can only be understood in its relationship to capitalism, how the two become so greatly integrated.

And I think when we do that, also we can see that the great promise of the Internet – and I think there is spectacular revolutionary potential, and some of it is coming to fruition with these technologies – we can see how we can protect what’s good and eliminate what’s bad, what sort of policies and changes need to be made.

But first, we have to get a sense of the basics of capitalism, what it really is

But the starting point for my work is we have to get a better sense of what capitalism is than the sort of fairy tale stuff that these guys have. And here’s a few basics about capitalism that I’ve talked about in the book.

Capitalism is a historical system that will end at some point

First of all, capitalism is a historical system. It came into being for reasons; it dynamically changes constantly. Every generation it looks like it recreates the world. And it has a life span. It will end at some point. We don’t know when, we don’t know how, but we do know it will end. It might take [all of us?] with us (sic) – let’s hope it doesn’t – but it will end at some point.

Class inequality is built into capitalism, as French economist Thomas Piketty has empirically documented – the rich get richer and the poor get poorer

We also know about capitalism that class inequality is built into its bone marrow, it’s in the DNA of the system. And this is a point that theoretically most people get when they think about it – our students certainly get.

But this was a really interesting book* that just got translated into English. Some of you might have seen it. It’s been getting a lot of attention. Paul Krugman’s been writing about it a lot. By Thomas Piketty, a French economist, a mainstream French economist, who basically spent the last 15 years studying economic data from a number of capitalist countries including the United States. And again, this is mainstream economist doing pure quantitative research. And his research has found that economic inequality will logically continually grow under capitalism; it will literally grow. The exceptions when it doesn’t grow you can explain usually – a world war, a depression that leads to some imbalance that gives labor a certain amount of power for a certain period. But it will revert back to the situation that inequality will always grow — the rich get richer and the poor get poorer, relative to the rich.

When you have stagnating capitalism, as we have now, income inequality grows

And actually this is not even a debated point. The economists who reviewed this acknowledged that, yeah, the data’s clear on that. That’s how capitalism works. That’s the nature of the system. Moreover, what Piketty found was – and this again isn’t controversial, it’s logical — that when you have a stagnating capitalism, like we do, with very low growth rates, that what will happen over time is that as that income inequality grows, increasingly those at the top will be from inherited wealth. That we’re in the process now of seeing the great wealth that dominates our societies increasingly going to be of the inherited variety. [*Source: Capital in the Twenty-First Century].

It’s hard to start companies and create industries in stagnant economies

[What happened in the past] that people actually go out and start companies and create industries – that’s rear view mirror stuff for capitalism in stagnant times. That’s almost impossible to avoid in a stagnant economy, to not have that happen. It’s always happened historically. That’s clearly what’s going on right now.

Monopoly is built into capitalism; all capitalists strive for monopoly status

Likewise, built into real world capitalism, not the fairy tale about the little entrepreneurs, is monopoly. Monopoly is a dynamic and crucial part of capitalism. It makes perfect sense. If you’re a capitalist you want to be as close to monopolistic as possible – less risk, higher profits. All rational capitalists strive heavily for monopoly status. And so you get it. It’s the logical outcome of capitalist competition or capitalist markets is monopoly power, large firms that dominate markets.

Monopoly aggravates stagnation because it depresses investment, quality of life suffers

Monopoly, interestingly, along with inequality, aggravate one of the great problems of modern capitalism, one we all live with today, which is stagnation. Capitalism is growing at a very slow rate, standards of living plummeting, resources to pay for social services – pensions, things like that – under attack. The quality of life basically suffering. Monopoly aggravates it because it depresses investment.

Inequality aggravates stagnation because it depresses purchasing power

Inequality aggravates it because it depresses purchasing power of people to buy stuff to keep the economy growing.

Right now we have raging stagnation, monopoly, inequality – a full frontal assault on democracy

So a combination – we have great stagnation too. So we have stagnation, monopoly, inequality. All raging. That’s real world capitalism. That’s where we’re living it, right now. And when you add that all together, what you have is nothing short of a complete full frontal assault on any reasonable notion of democracy, or self-governance that could possibly exist.

Another brilliant research study showed that ordinary people have zero influence on public policy decisions by the federal government

Some research that some of you might have seen; it’s going to be published this fall; some web sites have been carrying some of the research of Marty Gilens, a professor at Princeton, an outstanding political scientist, Ben Page a professor at Northwestern. And what they found basically is what a number of other political scientists and social scientists have found in research in the last two years.

Only the very wealthy have the superpower to influence policy decisions at the top

They went and they spent 20 years basically examining every public policy decision by the federal government in 1981 and 2002. They looked at 1800 different decisions, federal decisions, and they found that very wealthy individuals and trade associations connected with businesses had superpower to influence the decisions, and basically all the decisions could be attributed to those small sectors; and that the voting population, the people of the country, had zero influence on any of them.

The public may think they have influence, but their opinions meant nothing

And we only had the illusion that normal people had, or regular people, non-wealthy people had influence over its decisions. We only had that illusion because sometimes people will agree with the decision that’s made. They just agreed with whatever policy decision was made in a survey. But their opinion meant nothing. As Gilens and Page pointed out, whenever there’s a conflict, the majority of the people that wanted X, but the people at the top wanted Y, Y always won. No case of X beating Y, when money was on the line. [The book is Affluence & Influence: Economic Inequality and Political Power in America. Author Martin Gilens wrote about the book in the Boston Review. Click on the preceding linked titles to read the article].

The political economy is extraordinarily corrupt and undemocratic – that’s capitalism in the real world

So that’s what you get. That’s the sort of political economy we have. Extraordinarily corrupt. Extraordinarily undemocratic. And pointed in a direction that doesn’t give us much of a future.

So that’s capitalism. That’s the capitalism I want to bring into the Internet – the real world that we’re living with.

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This entry was posted on January 11, 2016 by in evidence based counterpower, political action, scientist's counterpower and tagged , .
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