A Brief History of American Capitalism: Proprietorial Competition, Industrial Feudalism, Fordism, and Neoliberalism
By: Henry Silver
Tags: Capitalism, Economics, Labor, Free Market, Competition

The octopus of monopoly, in this case Standard Oil Inc., strangling government with its grasping tentacles

Before large corporations and commercial combines emerged in the rough industrial heave of the 19th century, the United States had a form of capitalism nearly unrecognizable to the modern observer, to the extent that an economic model inalienably reliant on massive state intervention to overcome the impracticability of market discipline and comparative advantage can be called capitalism. By “capitalism,” I simply mean capitalism in its really existing form, not in some alternative form one might dream of in a haze of febrile idealism or at a plate-glassed academic symposium. Total capitalism has only been practiced in what we call the Third World, which became the Third World in the first place by the forcible application of unconditional free-market principles, coerced by powers that themselves industrialized by way of intensive interference with market deformities. As a matter of fact, to this day, the only component of the American economy that functions according to approximate market characteristics is the financial sector, which lurches predictably from one catastrophe to another and must periodically beg the state for rescue.

In the age before monopolies and trusts, what might justifiably be called small-scale, proprietorial capitalism prevailed. Tiny concerns, owned by a few bosses or tradesmen and operated by a handful of workers or journeymen, competed by rivaling one another in the provision of apprenticeships, living accommodations, food, and other remunerative devices that antedated the regnant wage model. Far from rich but reasonably secure in their trades, the majority worked in the same place their whole lives without interruption. A perennial shortage of labor meant that companies had to offer inducements for workers to join them, rather than the other way around. Likewise, independent artisans and craftsmen, then unfettered from the bonds of wage slavery but long since swallowed into the steely meat grinder of what John Dewey called “industrial feudalism,” sold the fruits of their labor to their countrymen rather than themselves to despotic masters and managers. One of the reasons that Thomas Jefferson, James Madison, and Benjamin Franklin tentatively favored the preservation of chattel slavery was their fear of the “daring depravity of the times” and the rise of “dependence” in the industrializing North — namely, that waged workers would become disposable cogs in a well-oiled machine, whereas guildsmen commanded their own labor and masters at least had some incentive to take care of their human property. The master buys the body of the slave, which must be minimally nursed, fed, and sheltered for a handsome return on the original purchase. The waged worker, however, rents himself transiently to the boss, who has little occasion to concern himself with the welfare of his rental and has a large reservoir of other rentals at the ready for replacement. If you rent a car, what material reason have you to take proper care of it?

The early American craftworkers and artisans of the 18th century roughly resembled the bourgeois urban guildsmen who began to spring up across European city states, most perceptibly during the Renaissance. Meanwhile, American farmers practiced an inchoate form of Jeffersonian self-sufficiency and tended to hold Hamiltonian industrial development and state protection, notably the Tariff of Abominations, in contempt, but of course the broad mass of American agrarian output hinged on chattel slavery and monopolization of cotton, both endorsed and bolstered by the state and specifically excoriated by Adam Smith in his ignored recommendations for colonial economic policy. Still, the scale and top-down character of these firms were microscopic by contemporary standards. In the words of a study published by World Bank economists Herman Daly and Robert Goodland, “firms [were] islands of central planning in a sea of market relationships,” a patchwork of market “imperfections” in a tapestry of loose capitalist threads. As an aside, note that by the criteria of conventional economic theory, even the mom-and-pop grocery store down the street represents a blemish in the administration of market interchanges.

Secretary of State and Kentucky Senator Henry Clay, the forthright distruster of markets and capitalism who originated the American System

Be in no error. The lion’s share of these paleo-capitalist entities depended on state patronage in some manner or another—the steepest protective tariffs in the world, duties, quotas, subsidies, government-backed monopolization of staple exports, ruthless enforcement of chattel slavery, infrastructure projects often called “internal improvements,” state-directed extermination of the indigenous population, settler-colonialism, and other instruments fashioned under Henry Clay’s so-called American System — to overpower the cumbersome inefficiencies of the market, which all but the most wild-eyed capitalist economists have long ago decried, sometimes begrudgingly and with camouflaged polysyllables, as not only irreconcilable with economic development, but detrimental to it. If American firms had observed Adam Smith’s discarded program of “sound economics” and had upheld the iron laws of supply and demand and comparative advantage with undeviating rigor, the United States economy would to this day rely solely on the sale and exportation of animal furs, fish, tobacco, cotton, and a few other commodities. The American steel industry would never have developed. British steel was far cheaper and superior. The textile sector would never have developed. European competitors were far in the lead. Adam Smith’s free-trade principles and disdain for imperialism would have prevented the United States from expanding across and beyond the continent and extracting the riches of imperial plunder. The high-technology “fairytale” economy would never have developed. Modern telecommunications, cellular technology, computer architecture, and the Internet were innovated chiefly in the state sector on the public dime to socialize cost and risk in a spectacular abrogation of free-market dogma. As a matter of fact, the only part of the Internet not developed in the American state sector was contributed by the CERN program in Europe, another state-run entity. During his tenure as Federal Reserve chair, the “saintly” Alan Greenspan, to borrow the epithet of the “liberal” New York Times, rattled off a list of innovations that he attributed to capitalist ingenuity. All but one of them were innovated in the state sector, and the sole exception was radio transistors, invented by private researchers at Bell Telephone Laboratories, then under the control of AT&T, a government-guaranteed telecommunications monopoly.

The “Asian tiger” economies such as Singapore, South Korea, and India that neoliberal celebrants continually lionize as evidence of the triumph of global capitalism unsurprisingly industrialized by dint of a stunningly rigorous disruption of standard capitalist dogma, in part by securing rare latitude from the United States in the conduct of their internal affairs. In tandem with the market-distorting instruments I enumerated earlier, South Korea was so determined to accelerate its industrial development that, until recently, capital flight carried the death penalty. If these policies were promulgated in the United States, I sincerely doubt that free-market bloviators would hail them as conducive to a “ stupendous economic miracle,” but rather hysterically decry them as a return to Bolshevist authoritarianism.

In the decades following the Civil War, what remained of the paleo-capitalist ethos vanished and the neoteric American industrial model, originally called “armory practice,” rapidly took shape. Mass production, quality assurance, containerization, and the innovation of interchangeable mechanical parts – all developed in government armories – provided American manufacturing a leg-up in the arena of international competition. (For those untrained in parsing corporate newspeak, “quality assurance” means the protection of goods from deterioration before the point of sale, but not after. After the point of sale, planned obsolescence is not only tolerated, but heartily encouraged for profit maximization.) The notorious robber barons looted the riches of the post-feudal South and colluded to an unprecedented degree to subdue the radicalism and anarchistic sentiment of the Northern working classes, who so widely treated wage slavery as scarcely better than chattel slavery that this premise became an official slogan of the Republican Party, a grievance of Abraham Lincoln, and even a common motif of headlines in the New York Times. Regarded at the time as a moderate within the Republican Party, Lincoln often read the allocutions of radicals and even Karl Marx himself, described as a “friend,” in Horace Greeley’s New York Tribune and in private correspondences with Marx and other socialists. During and after the Civil War, anti-capitalist ideas, long anchored in the American tradition, swiftly became a conspicuous facet of intellectual life, seen as so commonsensical and completely uninfluenced by parallel developments in Europe that it was rarely even called “socialism,” “Marxism,” or other scare words by name. To beat back this trend, industrialists ensured that trade unions were smashed, often by violence so bloody and heinous that even conservative publications in Britain were aghast. The Homestead Strike alone drenched the annals of American labor history in blood. Radical journals such as Mother Earth and newspapers such as Appeal to Reason, once well-read and lively fora for working-class political ferment, were silenced and ultimately exterminated. Faced with a growing surplus of labor, including a fresh supply of women and children ripe for exploitation, jobless workers now increasingly had to compete with one another for breadcrumbs and employment rather than having firms bid for their engagement. Competition thereby started to shift away from companies and onto workers themselves in a race to the bottom whose spoils belonged to those prepared to rent themselves for the lowest wage rather than a race to the top for which firms provided the best goods, services, and terms of employment. Insecure in their positions, waged workers feared that striking and joining trade unions would doom them to be sacked and replaced by scabs, a nearly ubiquitous business practice. The adages “gaining wealth, forgetting all but self” and “all for ourselves and nothing for anyone else,” which authentic classical liberals such as Adam Smith decried as “the vile maxim of the masters of mankind,” became the zeitgeist of a new epoch. To borrow the almost vulgar inverse-Marxist rhetoric of the ascending oligarchical caste, the beast of labor had been put in its cage. By the “Gay Nineties” (the 1890s), Fukuyama’s end of history had come a century ahead of schedule. The utopia of the masters over the masses had prevailed. Or so it was falsely assumed, as at virtually every stage in history in which the ruling class reorders the world according to its designs, cocksure in the conceit that its reign has entrenched itself indefinitely and that just a little tinkering at the margins will suffice.

Industrial monopolist and Republican Senator Mark Hanna

Companies congealed into vast conglomerates of industrial supply chains, cornering markets and cajoling federal, state, and local governments alike into submission. Businessman and Republican Senator from Ohio Mark Hanna, who directed William McKinley’s 1896 and 1900 Presidential campaigns, once admitted that “there are two things that are important in politics. The first is money and I can’t remember what the second one is.” To finance their sleek and stage-managed campaigns, politicians now had more than ever before to leap into the pockets of those with money — the coalmine owners, the oil barons, the factory managers, the railroad racketeers, the steel tycoons, the mill masters, the sharecropping bosses in the postbellum South, and so forth. In jurisprudence, contorting the Fourteenth Amendment beyond its original purpose of protecting and enfranchising newly freed slaves, corporations began to obtain rights equal to and even greater than flesh-and-blood human beings. At the time, genuine conservatives objected to this development as a stride towards what they often called “incorporated communism” or “corporate collectivism.” If you think about it, they were dead right: inorganic and highly totalitarian institutions, over and above individuals, accorded supreme rights. Why should a company, a centrally-managed warren of unaccountable private tyranny run by a cabal of unelected managers, have rights superior to those of an individual? At its root, a corporation assumes the mold of what in the political sphere we unblushingly call fascism — a clique of order-givers presiding over a hive of order-taking drones. Orders come from the top and are handed down by managers to voiceless automata with no role in decision-making who must rent their labor, the only factor of production over which they have any control, to apply productive economic instrumentation in exchange for a fraction of the real value of their labor — namely, a wage.

Despite Woodrow Wilson’s brutal project to vanquish labor for all time to come, industrial profitability began to dwindle in the late 1920s and labor began to reorganize to struggle for the improvement of its station. By an earthshaking groundswell of popular demand and labor militancy, the American economy soon entered what some have termed the Fordist phase of capitalism — alternatively “regimented capitalism,” “egalitarian capitalism,” or the “golden age of capitalism.” The miserly New Deal programs reluctantly introduced by Franklin Roosevelt rounded out the rough edges and softened the harsh blow of the Great Depression, but deflation and unemployment persisted. Out went the Smoot-Hawley Act and other protectionist measures, but the malaise lumbered on. State planners then confronted a crossroads: to choose a mixed economy predicated on the fruitful social works favored by John Maynard Keynes or to choose rearmament and a pseudo-Keynesian state-coordinated military economy. They selected the latter, for numberless reasons besides just the wartime conditions. For instance, an authentically Keynesian mixed economy would have entailed a socially redistributive and democratizing effect that the business class was unprepared to swallow even under the grim extremities of the 1930s, whereas a militarized economy would have entailed a socially consolidatory and un-democratizing effect tolerable to most of the privileged elite, despite the high taxes. After all, determining how many tanks or B-17 bombers we plan to produce in a year doesn’t require popular participation, so it was a softer-sell to industrial managers and aristocrats.

1944 Conference at Bretton Woods, a resort in the White Mountains of north central New Hampshire at which the post-war global financial order was brokered with the United States as world banker

To fuel the fiery furnace of the war economy and to stimulate consumption of surplus goods, American industry needed a minimally fit, well-educated, and well-taken-care-of workforce with enough money to purchase the output of domestic production. On state decree, Henry Ford’s blueprint of handsome hourly compensation, generous benefits, safer working conditions, and decent pensions triumphed over the miserly austerity of the era that followed the First World War. It should be noted, however, that when Ford tried to raise his workers’ wages without state backing, his majority shareholders, the Dodge brothers, sued him in 1919, ultimately before the Michigan Supreme Court. The court ruled that “shareholder primacy” and “fiduciary responsibility” meant that Ford could not even choose to increase compensation for his workers because it would have incommoded short-term profit and dividend maximization, even if pay hikes lifted profits in the long term after attracting productive and loyal workers. This is but one of many cases of companies privileging class war even over long-term profit maximization.

To cast off the millstone of fiduciary responsibility, the federal government ratified the minimum wage, unemployment protection, and Social Security as devices for smothering popular discontent and wheedling the populace into submitting to the new military economy. Companies engaged in the war effort adopted Taylorist structural renovations – developed, predictably, in the military where large-scale experiments can be carried out – to robotize labor, to introduce “off-job control,” and to intensify the top-heaviness of industry. (Incidentally, Vladimir Lenin was besotted with Taylorist managerial techniques and applied them liberally to Soviet industry.) In a physiocratic program devised by then Secretary of Agriculture Henry Wallace, the government intervened to rescue embattled farmers from deflated agricultural prices. The Bretton-Woods system of “embedded liberalism” was established to put the genie of finance back in its lamp, to fetter capital mobility, to slough off the deflationary yoke of the Gold Standard, and to lubricate the flow of global trade. From the Second World War to 1970, the United States experienced a spell of rip-roaring economic growth, more egalitarian than anything it had seen before but still altogether compatible with the enlargement of obscene private profit. Owing to a confluence of variables, the pseudo-Keynesian consensus of well-regulated capitalism and peripheral indicative planning crumbled in the 1970s, giving way to what we now know as neoliberalism and globalization, even though the former has nothing to do with liberalism and is not new at all and the latter entails international integration only in an extraordinarily impoverished sense. In diametrical opposition to the Bretton-Woods model, finance was unleashed and trade became rigidly protected, principally from Asian competition. This realignment ensured that the objective of the state was no longer to fortify industry by providing a minimum program of soft palliatives and welfare for the citizenry and modest constraints on capital, but rather to subserve commerce and finance above all and to maintain a nanny state for private power, concentrated in tighter and tighter agglomerations. Why would the state need to care for the American worker when production had relocated abroad to regions of cheap labor and high repression? Why would the state put limits on capital when the domestic economy had steeped itself in consumption, debt peonage, and financial speculation to service that debt? Why would the government, run by politicians who bankroll their campaigns on the corporate dole, spend on social programs when the military, carceral, and biomedical sectors supplicate for state aid in churning out the next advances in the high-technology economy, thereby mopping up otherwise dreadful economic and unemployment statistics? In a word, “socialism for the rich and rugged individualism for the poor” now loomed large over the heads of all like Damocles’s sword. The private empires that govern the world demand socialism for themselves and an obsessive, inverse-Marxist class solidarity among their exclusive fold lest the charade of “free markets,” “open trade,” and “limitless growth” be exposed. The prodigious national debts of Western governments attest to the necessity of state-directed injection of public money into private coffers in order to puff up this thinning smokescreen.

This gulf between the privileged few and the toiling many is no secret. The almighty Greenspan admitted in an address before the U.S. Senate in February 1997 that the post-1970s economic order relies on “growing worker insecurity … [to keep] inflation and inflation expectation low, thereby promoting long-term investment.” To translate, stagnation of wages, worker precarity, and cutbacks in basic social spending reduce inflation and ensure sky-high bank profits and investment dividends, all on the backs of the majority of the general population. Even Citigroup published a rather triumphalist brochure titled “Plutonomy: Buying Luxury, Explaining Global Imbalances” in 2005 that begins, “The World [sic] is dividing into two blocs — the Plutonomy [sic] and the rest.” The plutonomy denotes the rich, who purchase luxury goods and other expensive products, so that’s where the easy pickings must lie. Citigroup speculated that their “plutonomy index” would outperform the stock market. Suffice it to say, they regretted the brochure’s publication and attempted to disappear it. In my experience, much of the business press and financial media have this sort of astonishingly honest reporting. They cater painstakingly to their target constituency. Adam Smith’s “masters of mankind,” who in exalted moments sometimes even anoint themselves “the masters of the universe,” must know what’s happening in the global economy at all times.

Piston production at a Soviet car factory, 1953

Since the birth of American industrial capitalism and its present-day neoliberal offspring, firms, once the “islands” in Daly and Goodland’s oceanic allegory, have approached the size of the “sea” itself. More precisely, they’ve become the massive tectonic plates shifting about beneath the feet of ordinary people and even national governments, helpless to defend themselves against the seismic terror. To the extent they ever existed, the limpid waters of competition have evaporated. First individual nations and then the global system became a network of giant command economies interacting and engaging with one another, often in oligopolistic “trilateral” blocs of coopetition and collusive “strategic alliances,” but not trading or competing in any credible sense. A hefty proportion of cross-border transactions now lie within a single firm, a far cry from the victory of “free trade” and “mutual exchange of goods and services across borders” about which we hear so unbearably often from university professors, Heritage Foundation luminaries, and career politicians. By most figures, intranational and transnational interactions among independent entities have declined appreciably since the embrace of the neoliberal programs, in some cases to levels lower than the protectionist 1920s. The prevailing mode of globalized production has come to mirror that of the Soviet Union. In automotive production, state bureaucrats would direct that engines be forged in Leningrad, pistons be manufactured in Minsk, exhaust pipes be soldered in Warsaw, and the components be assembled into a vehicle in Moscow, with each step controlled by the same people. There’s nothing efficient or competitive about nationally disaggregated or internationalized supply chains. It’s a process of centrally-managed corporate mercantilism internal to a command economy.

Every private corporation is, of necessity, a tightly regimented command economy, a Soviet Union all to itself. If one takes for granted the Chicago school dictum that central planning is impossible at scale, then Walmart, the world’s largest private-sector command economy, should not exist. In their excellent People’s Republic of Walmart, Leigh Phillips and Michal Rozworski prove this contradiction systemically. By extension, if the economy at large were decentralized and run according to free-market principles, it would collapse almost instantly. In the Gladstonian delirium of the 1840s, the British government briefly experimented with free markets: independent industrial profitability immediately plummeted, unemployment exploded, the working class became extremely belligerent and began to combine into a revolutionary phalanx, industrial capitalists panicked, and parliament swiftly reinstated state intervention and market distortion. Likewise, if businesses were run internally according to free-market guidelines and governed by unchained competition, they too would instantly implode. For example, American billionaire Edward “Eddie” Lampert, the Ayn Rand ideologue and former CEO of the now bankrupt Sears, Roebuck and Company, attempted to marketize his corporation from within. In his cartoonish fantasy, the workplace itself would conform to free-market dynamics and feature total competition without any central planning. Just try to imagine an office full of workers at one another’s throats and robot auctioneers yelling, “Who’ll haul the merchandise to the warehouse for fifty cents? Do I see fifty cents? Seventy cents?” Once someone volunteers, his or her electronic geo-targeting wristband lights up with a countdown to complete the task in time before forfeiting the reward and lowering his or her rank on the worker scoreboard. Needless to say, Lampert’s objectivist experiment brought Sears to its knees, setting it on course to file for Chapter 11 bankruptcy in October 2018. If he continues to curse every business venture that he touches, he may even have to pawn off his 288-foot luxury yacht, the Fountainhead, named after Ayn Rand’s dreadfully overrated 1943 screed. (For the record, in many of its real-world warehouses, Amazon has already begun requiring workers to wear these Stalinist shackles on their wrists to monitor their movements and even mandates that some workers put on diapers to minimize bathroom breaks.)

To come to the point, in order for the presently-constituted economy to operate at both the macrocosmic and microcosmic scales, collectivism and central planning must be practiced, so the “masters of mankind” decided to individualize labor, collectivize business class-consciousness, centralize corporate management, and globalize the dominion of capital.

Edward Bernays, nephew of Sigmund Freud and father of American public relations

Let’s not forget public relations and mass advertising, American inventions born largely as the brainchildren of Walter Lippmann and Edward Bernays, both beloved by the Wilsonian progressives who fancied themselves the “benevolent philosophers” of whom James Madison dreamed before the realism of his advanced age. In the early 20th century, these two men perfected the American model of propaganda, a now defamed word that they and others openly used at the time. In order to stamp out what the National Association of Manufacturers inverse-Marxistly called the “hazard facing industrialists” of the “newly realized political power of the masses,” it was concluded by companies such as AT&T that the “public mind” had to be “controlled” by “educating the American people about the economic facts of life” through huge propaganda efforts. Every university professor will begin an introductory economics course by inculcating into his or her students’ heads the theoretical tenet that markets depend on informed consumers making rational choices. In practice, if you flick on a television or watch a YouTube commercial, you’ll instantly face a barrage of propaganda wheedling you, in the wise words of the late George Carlin, into purchasing things you don’t need with money you don’t have. Modern commercial marketing even has something called “nagging psychology” wherein children are conditioned to “nag” to their parents to buy the latest toy or gadget. To illustrate, if practice even resembled free-market theory, an automotive commercial would consist of an objective précis of the features and specifications of the vehicle on sale. In reality, you’ll see a hunky football player ascending the treacherous slope of a mountain or a scantily-clad supermodel spread out on the windshield with little to no reliable information about the car itself. Thus advertising became yet another potent instrument for overcoming markets and competition. If a large firm drenches the airwaves with one-sided propaganda, how will enough people ever know that a smaller competitor produced a better alternative or developed a superior service at less cost? Tellingly, most profits in the corporate sector that don’t flow into executive and shareholder bank accounts enter marketing and public relations, not research and development, putting the lie to the Greenspan delusion of “capitalist innovation.” Most pharmaceutical R&D, for instance, takes place in the state sector – at public university laboratories and the National Institutes of Health – while most of the expended profits go into advertising the drugs after the government dutifully privatizes them.

Faith in the power of deceit is shared in the places that matter, in policy-making centers and particularly in the business world. Corporations spend hundreds of billions of dollars in advertising each year, not in an effort to inform, but in an effort to mislead. The case of drugs is especially striking, not only in scale, but also in other ways. For example, in the mid 2000s, the United States attempted to negotiate a “free-trade agreement” with Australia — in accord with the standard doctrinal lexicon, it entailed neither “free trade” nor an “agreement” — but the process was held up for some time because the United States objected to Australia’s highly efficient healthcare system, possibly the most efficient in the world. The same drugs cost in Australia a fraction of their price in the United States. Like almost every nation besides the U.S., the Australian government haggles over prescription drug prices with pharmaceutical distributors. In most instances, the same companies produce these drugs and turn a tidy profit in Australia, but gain a roughly tenfold windfall in the United States. To what in particular did the American negotiators object? Well, to borrow their phrase, that the Australian model is “evidence-based.” If a pharmaceutical firm wishes to advertise a drug in Australia, it must provide verifiable empirical evidence that the medicine has the claimed effect and is superior in some fashion to a cheaper alternative already on the market. According to the American negotiators, that “evidence-based” approach “interfered with free markets” because corporations must have the right to deceive. Frightened of the repercussions of betraying the global mafia don, Australia diffidently backed off. This affair demonstrates that the purpose of advertising, once again, is to undermine markets, not to uphold them.

John Kerry and then Ohio Congressman Ted Strickland hunting geese, 2004

Public relations has infringed on the political sphere in a manner remarkably similar to that of business practice. Like toothpaste and lifestyle drugs, candidates must be marketed and sold to the electorate by projecting imagery to delude and suppressing information to confuse. The 2004 presidential election between incumbent Republican George W. Bush and Democrat John Kerry offers a valuable specimen of this phenomenon. Both candidates were carefully trained to cut a figure deemed marketable to the general population. For want of genuine policy disagreements, intellectuals often delighted in ridiculing George Bush’s lowbrow demeanor and use of malapropisms such as “misunderestimate,” but my strong suspicion is that he was trained to behave like this in order to efface his origins as a spoiled Yale frat boy and to project the image of a Texan roughneck, an ordinary person just like you who raked his hoe on his (fake) Crawford ranch. Meanwhile, John Kerry, another spoiled Yale aristocrat, was cast as a goose-hunter and a motorcycle rider. The liberals hailed Kerry’s “tactic” to appeal to rural voters and his “serious” and “statesmanlike” bearing, while the reactionaries lauded Bush for his more convincing showmanship as a lovable country bumpkin with whom “you would want to have a beer.” If you don’t recall the policy discussions from this election, you’re not alone. The absence of substance was by design. It was crucial that people be kept from knowing the stands of the candidates and their parties on issues. Why? Because as usual, they were virtually indistinguishable, not just in policy matters, but also in their histories. Both men attended the same elite university and belonged to the same powerful secret society, Skull and Bones, so personalities had to be constructed and substantive discourse subdued at all costs. For example, Bush had to “stay the course in Iraq” whereas Kerry wished to “have a clearer exit strategy” and manage the war a little better. This propaganda technique largely worked. Right before the election, pollsters asked probable voters for the justification for their intended vote. Only about 10% reported that they were voting on the basis of their favored candidate’s stands on “issues, agendas, policies, and ideas” — 6% for Bush voters and 13% for Kerry voters. The rest were voting for “qualities” and “values” in the vernacular of the public relations industry.

The strongest support for John Kerry came from people most deeply concerned about healthcare. What was Kerry’s healthcare policy? Very few people know. It’s hard to determine. He certainly never stated it in any comprehensible way. After the last debate of the campaign, The New York Times commented that Kerry hadn’t even hinted that as president he might touch the question of healthcare because any advance towards such a policy would have, in their words, “no political support.” According to the most recent poll, about 80% of the general population believed that the government “ought to guarantee healthcare to everyone” as a “moral obligation.” Still, there was (and still is) “no political support.” The pharmaceutical companies are opposed, the financial institutions are opposed, and the insurance industry is opposed. Therefore, the topic can’t even be raised. In fact, it must not be raised for fear that it might be seen to be a legitimate point of view.

A metric used by political scientists called “issue awareness” hit an all-time low in 2000. In 2004, it was even worse. Now they couldn’t even measure it because the suppression of information was so extreme that voters tended to assume that the candidates shared their opinions, even when the party platforms explicitly rejected them. A staggering number of Bush voters voted for Bush because they thought he had Kerry’s policies, and a lesser but still sizable share of Kerry voters voted for Kerry because they thought he had Bush’s policies. Even larger proportions of both voting camps voted for their candidates on the grounds that they had policies significantly to the left of Kerry. (The United States is a business-run society so the “public mind” must be rigorously polled. Business must know what people are thinking and react accordingly. Polls such as the one I just cited are regularly published, but seldom reported in the media, most likely out of embarrassment and fear that the rascal multitude might discover the vacuity of American democracy.)

The late sociologist C. Wright Mills keenly observed that the United States is de facto a one-party dictatorship run by the “business party,” which has two wings. Democrats and Republicans share common objectives and assumptions, obey the shifting plate tectonics of vying parts of the business constituency, and have lively debate within the exceptionally narrow spectrum of opinion that a dictatorship of business allows. From about the 1930s to the 1970s, this paradigm reduced procedural democracy to a consultation of the public about the ratification of one of two slightly differing programs. You might call this “boardroom democracy.” In a corporate boardroom, the directors are all on the same side, but have lively debates about how best to ensure short-term profit and dividend maximization. In the decades after Mills first noticed this paradigm, the situation worsened. Since the 1980s and particularly since the Clintonite takeover of the Democratic Party in 1992, the United States has become a one-party state governed by the business party, which now has only one wing with two tendencies: moderate 1980s-style Republicans in the Democratic Party and extreme Republicans in the GOP. This development has all but reduced procedural democracy to a stage-managed farce in which the electorate must choose which mascot should provide the pageantry for the country, sort of like the Queen of England. Should it be the “tough” Ronald Reagan who puts on his cowboy boots and rides off towards the sunset on his horse to slay the dastardly Nicaraguans and Granadians or the “level-headed” technocrat Walter Mondale who will save the country by burying his head in a stack of books and ledgers? The almost identical policy positions of the candidates fade into the background.

Capitalism’s inevitable dependence on the state

On the rostra and lecterns of the World Bank, the International Monetary Fund, and the World Trade Organization, Western statesmen and global businessmen preach free-market pieties to the Third World, which we ourselves only recently put into partial effect with cataclysmic consequences for our own underclasses, so that they never develop properly and remain docile milksops at our heels. We should always recall that under current economic conditions and proprietorial relations, capitalism and competition never work on their own and certainly never operate according to neoclassical doctrines. Irrespective of the form they assume at one time or another, they must rely on the state and other market-disruptive devices or else convulse into an excruciating rigor mortis of ungovernable social squalor and ruination.