If the working class is rising up, what are they rising against? Hardly anyone calls himself<\/em> a “neoliberal,” and critics load a lot of diverse\u00a0ideas into that term. It presumably doesn’t mean libertarianism or laissez-faire, because then we could just use those words (dropping the “neo-“). What’s more, the US and EU have not<\/em> moved in a libertarian direction. Here, for instance, is the trend in government spending as a percentage of GDP in the USA. It’s basically up, albeit\u00a0with declines\u00a0in the\u00a0last six years of both the Clinton and Obama administrations.<\/p>\n The volume of government regulation is also up, although that’s\u00a0harder to measure. This is the\u00a0size of the annual federal compendium of new\u00a0regulations, measured in pages. A libertarian regime would not issue 80,000 pages of new rules\u00a0per year.<\/p>\n <\/p>\n There are many good things about regimes like the\u00a0US and the EU member states. In broad, historical context, they are relatively free, prosperous, safe, and democratic. Nevertheless, I will emphasize the negatives, for much the same reason that your doctor wants to talk about your hypertension and family history of cancer, not how wonderfully well your liver and kidneys are working. In other words, I’ll offer a\u00a0critical assessment even though there\u00a0would also be many\u00a0positive to\u00a0points to make.<\/p>\n In brief, I think\u00a0that states are increasingly powerful, but they are accountable to\u00a0capital, not to citizens. That’s what critics\u00a0mean by “neoliberalism,” although “state corporatism” might be a better phrase. I’ll break the diagnosis into six parts.<\/p>\n 1. Deindustrialization<\/strong><\/p>\n We call the wealthiest countries of the world the “industrialized” nations, but that description\u00a0is becoming obsolete. These countries did industrialize after 1800 but have\u00a0shed most of their manufacturing jobs. Below is the trend for the US since 1977. The graph understates the\u00a0decline, because many more than 14% of households<\/em> had at least one manufacturing worker, usually a man, in 1978. Also, the rate was higher in 1950, but I can’t find a longer time series. In any case, the decline since 1977 has been steep. Manufacturing jobs are rarely\u00a0enviable, but they give their workers political leverage because they require expensive, fixed investments. Ford’s River Rouge\u00a0plant\u00a0in Detroit employed 100,000 men at its peak (versus 6,000 people today). Autoworkers\u00a0could organize and strike. They voted in city and state elections.\u00a0It was expensive for Ford to move its investments out of Detroit, although that\u00a0gradually happened, and the city has lost 61% of its population. But in the heyday of industrialization, Ford needed those men to be reasonably happy.\u00a0In return,\u00a0manufacturing workers\u00a0benefitted from their political leverage–including Black workers, whose civil rights improved<\/a>\u00a0with their concentrated market power\u00a0in\u00a0factories.<\/p>\n By contrast, Google, which is worth about half a trillion dollars, employs some 50,000\u00a0people, worldwide. They are well paid, but they remain at Google for\u00a0a median<\/a> of 1.1 years. They have market value–far above the average market value of average\u00a0Americans, let alone average\u00a0human beings–but they have\u00a0little\u00a0or no political leverage. Even the best-paid\u00a0are dispersed, transient, and eminently replaceable.<\/p>\n 2. Mobile capital<\/strong><\/p>\n The fact that you can now make more money by investing in intellectual property and networks rather than rooted industries is one reason that capital moves\u00a0faster than ever before. Capital mobility is also encouraged by favorable laws and treaties and by financial instruments, analytics, and other tools that assist investors.<\/p>\n The result is a substantial increase in the leverage of capital even as the leverage of labor has weakened.\u00a0Businesses gain\u00a0their\u00a0“privileged position<\/a>“–even in democracies with free and fair elections–from two major sources. First, since a business is organized, it can deliberately advocate for\u00a0its interests by lobbying or advertising, whereas diffuse\u00a0interests (like consumers or workers) have much more trouble acting politically. Second, investments are essential for prosperity, and a business can move its investments. Thus, even without lobbying at all, a business–or an individual investor–gains leverage over governments. Its\u00a0ability to invest and or disinvest gives it\u00a0power. That power has rapidly increased. It also reinforces …<\/p>\n 3. Deference to wealth<\/strong><\/p>\n This point is harder to quantify, but I perceive that we live at a time when billionaires, celebrities, and CEOs are given\u00a0extraordinary deference, especially in comparison to run-of-the-mill elected officials, civil servants, union leaders, and grassroots organizers. Politicians, for instance, are constantly in contact with their wealthiest constituents. First-year Democratic Members of the House are advised<\/a> to spend four hours per day of every day calling donors. Meanwhile, many advocacy groups are funded by rich individuals, not sustained by membership dues, so their leaders are also constantly\u00a0on the phone or at conferences and meetings with\u00a0wealthy people. The conversations in these settings tend to be deeply deferential, and they occur behind closed doors. Of course, these habits are abetted by laws and policies–especially, laws governing campaign finance in the US. But we observe somewhat similar deference in other countries with better laws. I think the deeper cause is the shift of\u00a0leverage to economic elites.<\/p>\n 4. The market colonizes the public sphere\u00a0<\/strong><\/p>\n “Commonwealth”\u00a0is a translation of “republic,” which could be more\u00a0literally rendered as “the public’s<\/em> thing.” In a republic, the government is supposed to be distinct from the private sector. As\u00a0the\u00a0custodian of the common wealth, it\u00a0operates on different principles from a market. These principles are not simply majoritarian, for the commonwealth belongs to our unborn children as well to us. We have no right to waste it by voting for the wrong policies. A republic strives to define and implement something worthy of the title “public good.”<\/p>\n That distinct ethic has been lost, as governments are almost universally seen simply as service-providers, constantly compared to businesses on the grounds of efficiency, and expected to compete\u00a0in a\u00a0market for popularity and influence. In a\u00a01870 case<\/a>, the Supreme Court declared a lobbyist’s contract void on the ground that it would be\u00a0“steeped in corruption” and “infamous” for any<\/em> business to hire someone “to procure the passage of a general law with a view to the promotion of their private interests.” The Court\u00a0added:<\/p>\n The foundation of a republic is the virtue of its citizens. They are at once sovereigns and subjects. As the foundation is undermined, the structure is weakened. When it is destroyed, the fabric must fall. Such is the voice of universal history. The theory of our government is that all public stations are trusts, and that those clothed with them are to be animated in the discharge of their duties solely by considerations of right, justice, and the public good.<\/p><\/blockquote>\n We certainly didn’t live up to those words in 1870s, when government was in many ways more corrupt than it is now. But the animating philosophy of a public good was still alive then. In contrast,\u00a0Buckley v Valeo<\/em> (1976) defines political money\u00a0as constitutionally protected speech, and Citizens United<\/em> (2010) equates businesses with civic associations. These are examples of a general erosion of\u00a0a\u00a0distinction between public good and private interests.<\/p>\n 5. States have increasing power<\/strong><\/p>\n If we lived in a neo-“liberal” or laissez-faire era, states would be constrained. In some ways, they are, but they also have more access to data about people\u00a0than ever before; they have an easier time surveilling, influencing, punishing, and even killing individuals; and they operate increasingly powerful\u00a0systems for enforcing discipline, headlined by the vast prison system of the USA. Their ability to see, count, and\u00a0act also\u00a0extends far beyond their borders, making people in most parts of the world subject to more than one government at once.<\/p>\n 6. But states need their citizens less<\/strong><\/p>\n On the other hand, states don’t need their own citizens. They don’t need us as military conscripts, because they can fight using small numbers of highly equipped experts, and they don’t need most of us\u00a0as taxpayers, because they can finance their operations on international markets.<\/p>\n![\"fredgraph\"](\"http:\/\/peterlevine.ws\/images\/fredgraph-1024x395.png\")
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