Consumers of the World, Unite! A Dissection of Contemporary Mass-Man

There is something different, something new and unprecedented, about the generations of the 20th and 21st centuries as compared with all  those that went before them. This was already noted in 1930 by the great Spanish journalist and philosopher José Ortega y Gasset, when he unveiled[1] the phenomenon of el hombre-masa, the mass-man, otherwise known as señorito satisfecho (the self-satisfied little man). This curious figure (he couldn’t be me – could he?) was spawned and nourished in his millions by the Industrial Revolution, with its exponential increase in material production. He enjoyed a standard of living previously unknown to the wealthiest royalty, yet he was completely oblivious to the basis of that productivity. He was the product of universal education and literacy, yet entirely cut off from the spiritual and cultural roots of his own civilization. He was the “vertical barbarian,” unable to appreciate the centuries of labor required to pass from barbarism to civilization, the civilization to which he was heir, which he, as a result, would have a difficult time sustaining.

All of this strikes a deep chord: Ortega y Gasset was certainly on to something. But usually that something is misunderstood. Usually when people read his book they think of the “common man” as opposed to the educated man. Why, those of us with college degrees, we’re special and we understand what it is that separates us from “this crowd which does not know the law” (John 7: 49).

Actually, that’s not at all correct, at least by Ortega y Gasset’s own measure. For he specifically says that it is not a specific social class – the working class – that he has in mind when he talks of el hombre-masa. Certainly, in quantitative terms that is the most numerous and hence the most obvious candidate for “mass-man.” But that is the quantitative meaning. There is also the qualitative, “pejorative” meaning: “a kind of man to be found to-day in all social classes, who consequently represents our age, in which he is the predominant, ruling power.” Lo and behold, it is the man of science who is the “prototype” mass-man: “because science itself – the root of our civilisation – automatically converts him into mass-man, makes of him a primitive, a modern barbarian.” Ortega is referring here to the “barbarism of ‘specialisation’” which only knows its own little area of expertise and is ignorant of the rest.

A powerful thesis, this, which goes a long way to explain the degeneration of the university into the multiversity. And indeed, the dictionary definition of “multiversity” unwittingly bears witness to the phenomenon. Merriam-Webster defines multiversity as “a very large university with many component schools, colleges, or divisions and widely diverse functions.” Nothing about the fact that the “uni” is gone and only the “multi” is left. No unifying factor, just diversity, great diversity, specialization upon specialization with quantity alone left to qualify the association. Nominalism with a vengeance.

What, then, is the cement that holds this together? This is where I think I can add something to Ortega y Gasset’s masterly exposition. I would do so by pointing out the seemingly innocuous phenomenon of the consumer. Innocuous only until you start thinking about it. For then you come to the realization that only the generations beginning in the 20th century are made up of consumers. No generations prior to these have been. They are the first.

Of course, this does not mean that we are the first to consume. Everyone in every age must consume to live, obviously. What it means is that consumption defines us. Consumption for us is a given. We consume regardless of whether we produce, and that is the key point. Consumption for us has been divorced from production. Everyone consumes, regardless of what they produce.

Of course, there have been many in previous centuries who have lived in a similar situation. In societies with slaves or servants, there are always the wealthy who own or employ these menials, who in turn free them up from having to work themselves. They consume without producing. It goes without saying that the menials were not consumers, but producers: their consumption was paid for, and then some, by their production.

Likewise, those who worked for themselves first produced, and only then consumed. Consumption was tied to production and proceeded from it. There was no divorce of production from consumption.

And this was true from an early age. One had early on to work for a living, first in a simpler way, later on in a full-fledged occupation. Child labor was a given. No one ate without working, unless there was good reason. The Apostle Paul’s rule was universal: “if anyone is not willing to work, then he is not to eat, either” (2 Thessalonians 3: 10).

Everyone understood this: there is no consumption without production. And so people were not consumers, but producers who also consumed, whose consumption derived from their production: Say’s Law in practice. Consumption did not define the man, production did.

But all of this changed with the Industrial Revolution and the subsequent rise of the welfare state. The fabulous productivity of the machine age enabled a redistribution of the fruits of its production without a necessary connection to the production thereof.

Each generation since then has seen this gap between production and consumption widen. The Great Depression, while it saw widespread poverty and misery, also saw the exponential growth of the capacity to provide for those unable to provide for themselves. The miseries of the Second World War were followed by a postwar boom and flowering of a redistributionist system of wealth the likes of which the world had never seen. Every generation since then – in the West, the center of this transformation – has grown up with the proverbial silver spoon in its mouth.

Which is why what previously would never have entered into anyone’s head, is today a matter of course – to demand as a right the consumption goods which this form of civilization has made possible.

This is true not only of the citizens of the countries in which this productivity takes place, but also of the citizens of countries which do not experience, and never have experienced, such a level of productivity. They have tasted enough of the world of consumer goods to demand it for themselves, and if they cannot obtain it in their own countries, they will go where those goods are available, and do whatever it takes to get there and stay there.

Consumerism is, as Leslie Sklair noted, the most successful ideology of all time. “The practical ‘politics’ of [global capitalist] hegemony is the everyday life of consumer society and the promise that it is a global reality for most of the world’s peoples. This is certainly the most persistent image projected by television and the mass media in general. In one sense, therefore, shopping is the most successful social movement, product advertising in its many forms the most successful message, consumerism the most successful ideology of all time.”[2]

Sklair was writing in the 1990s, when the Internet was in its infancy and smartphones were not even in anyone’s dreams. Since then, the global reach of, and inundation in, consumerism has advanced exponentially.

All of this dovetails nicely with our reigning political and judicial ideology, centered in the notion of human rights and embodied in the mechanism which conflates subjective right and sovereignty, issuing forth in the sovereign individual. For according to this mechanism, everyone is entitled, not to what he or she produces, but simply to what is available, in accordance with the principle of equality and equal distribution. There should be no boundaries to the spread of wealth because the connection between production and consumption has been severed. I have pointed out elsewhere that the divorce of production and consumption is behind the massive trade imbalances our world is running, and the massive debt load these imbalances are generating. But beyond this lies the ideology of human rights, which is essentially an ideology of structural imbalance: everyone is entitled to consumption, regardless of what they produce.

Can the balance be restored? Not until the underlying philosophy, politics, culture, is transformed. Unless and until we restore the link between production and consumption – at every level. Until then, the conflicts and miseries we are now experiencing, especially in terms of migration, will only get worse. For the mechanism is inexorable.

Consumers of the world, forget the barricades. First, get on the wagon and restore, in your own lives, this most precarious balance. Governments won’t solve this, people will; only then can the people hold governments accountable. For people need to hold themselves accountable first.


[1] La Rebelión de las Masas, 1930; English translation: The Revolt of the Masses (New York: W.W. Norton & Company, 1932).

[2] Leslie Sklair, “Social movements for global capitalism: the transnational capitalist class in action,” Review of International Political Economy, Vol. 4 No. 3, 1997, p. 531.

On the Road to Elysium When fiction approaches fact

The 2013 movie Elysium depicts a dystopian future of unremitting, jarring poverty juxtaposed with serene, detached wealth. Literally detached: wealth resides in a lavishly equipped, lebensraum-furnished space station, high above an impoverished, exhausted Earth. The planet is only useful as a source of provision and maintenance for the space station; its fruits have been extracted and depleted, while the population is mainly left to its own devices, an excess labor force without the capacity to sustain a decent standard of living, the only purpose of which is to serve the elite floating high above.

It is a haunting image, as it should be. And, admittedly, an extreme one. But it resonates – because in this day and age, the gap between rich and poor has been steadily widening, bringing the Elysium scenario within the realm of the plausible. The purpose of this article is to explore how this has come about.

For starters, the problem with the world system as currently configured is that it divorces consumption from production – a recipe for disaster. For consumption needs to be funded, and there are only two ways to do that. Either produce, or borrow. The modern world has chosen – or, our betters have chosen – for the latter.

In the ideal economy, production and consumption are in a circular flow; supply creates its own demand. Production is in equilibrium with consumption, and pays for consumption. There are neither gluts nor shortfalls.

Of course, this is unrealistic. No economy is a closed loop like this. First, as discussed in the accompanying course as well as in this article, the so-called “problem of saving” makes its appearance, and complicates matters. This leads to two markets, not one – the ordinary market of production and consumption, and the financial market of credit and debt. This two-market framework is a natural outgrowth of the money economy. There is no ultimate disconnect between production and consumption here: the monies that flow into the financial market eventually flow back to the ordinary market in one way or another, closing the production-consumption loop.

But in the modern world system the circular flow of production and consumption is purposely disrupted. This is the heart of what is wrong with the world economy today. It is the issue that urgently needs to be addressed, because it is producing a time bomb that eventually must go off, with unforeseen and unfathomable results.

The disruption of production and consumption is primarily visible in the balance of trade. Nowadays, trade relations are characterized by sustained, sizeable imbalances. The inevitable byproduct of these imbalances, and what makes these imbalances so lethal, is debt. In a previous article, I wrote: “Trade imbalances have to be ‘financed’: in other words, they are paid for by debt. When trade imbalances are incurred, the countries running trade surpluses are also exporting capital: this is called a capital deficit. What they are doing is exporting demand, by exporting excess savings. To put it bluntly: they are extending the credit to the consuming countries that these countries require to buy their production.”

These countries are exporting demand. What does this mean? It means they are seeking to sell production, not to their own, domestic consumers, but to foreign ones. They are disrupting the circular flow. In a normal situation, they would not be exporting demand; domestic demand would match supply; they would be buying what they sell. Of course there are always surpluses and deficits, because no economy is entirely closed. But the sustained effort, the policy decision, to “export demand,” which means to shift consumption abroad, would not exist.

How do they do this? By suppressing domestic consumption. In other words, domestic producers are not being allowed to enjoy the fruits of their labor. The demand they otherwise would generate is being taken from them. Normally this would result in overproduction, a glut of goods and services, and prices would adjust accordingly, falling, bringing the unbalanced situation into equilibrium. But through various manipulations outlined here (under the rubric of currency manipulation), domestic production is put out of joint with domestic consumption, the producers are robbed of a portion of their earnings, and the shortfall is made up for by foreign consumption, which picks up the slack.

Why do they do this? Why engage in a conspiracy against the domestic economy in order to promote exports? Back in the late 1800s, the British economist John Hobson already had an answer. For him, British imperialism was a net loss, costing the country far more than it provided in terms of income or revenue. Not only was it prohibitively expensive, but it disadvantaged a broad swathe of domestic producers. Why engage in it then? His conclusion was that it provided an advantage to various vested interests – particular interests, as opposed to the common good – which in turn were able to influence policy in their favor. In other words, imperialism and colonialism subordinated the national interest to particular interests.

The same thing is happening today. Certain countries are pushing exports, generating massive trade surpluses year after year; while certain other countries are living beyond their means, running the mirror image of trade deficits, year after year. The usual mantra we then hear is that the exporting countries are virtuous, disciplined, hard-working, while the importing countries are lazy, decadent, improvident – but it would be more accurate to characterize each as victims of a regime, which exploits both ends of the trade equation.

The transnational capitalist class (TCC – of which more here), composed of various manifestations of “Davos Man,” is the ultimate beneficiary. By engaging in this debt-funded, imbalance-riddled economic system, it is able to funnel the surplus value generated by forced savings into its own pockets, while allowing various debt mechanisms to provide for the indispensable consumption that enables this gravy train to keep going.

In other words, a significant portion of the ever-burgeoning global debt burden is simply the flip side of an equally significant sum of profits disappearing straight into the pockets of our modern-day benefactors, the global corporate elite, along with their cronies, facilitators, and enablers in their various support roles in government, politics, academia, the entertainment industry, and the news media. The tab will be paid by future generations, when those various debt instruments come due. Après nous, le déluge.

This is the source of the widening gap between rich and poor worldwide. This is the road to Elysium.

How is this debt-funded consumption sustained? Let the reader understand: this is the key to the modern political scene. This arrangement, this racket, runs through a political system revolving around identity politics. This is what makes the gimcrack mechanism go. Identity politics, as I outline here, serves to defuse and divert opposition to the global capitalist regime. It deflects leftist agitation away from its home base, the class struggle, toward the safe – for hegemonic capitalism – alternative of identity politics. In fact, it serves as a key brick in the edifice of this hegemonic capitalism, for identity politics dovetails precisely with the culture-ideology of consumerism that locks peoples and nations into their economic roles within the system.

It turns out that identity politics provides the justification, under the guise of “human rights,” for never-ending deficit spending on entitlements. In other words, not only does it foster the ideology of consumerism, it also provides the legitimation for debt-financed consumption, which is the key to maintaining the gravy train of profits into the pockets of Davos Man.

In this age, respect for human rights is considered the sine qua non of civilized society. But what are human rights really? An understanding of their origin sheds light on their conflicted character. They came along during the “Age of Enlightenment” of the 18th century, to take the place of religion as the source of law. As I wrote back in 1995:

Religion was relegated to the privacy of one’s own conscience. It was therefore also removed from any influence on public life. What replaced it, in early liberalism, was a focus on property rights; when that produced alienation, the focus shifted to collective property redistribution. These are modernism’s first principles, and they are Epicurean, materialist, consumerist. Both foci, property and redistribution, have at their core the consumerist individual. It is consumption – appetite – which this society worships. Human rights mean that each individual has the inalienable right to satisfy those appetites. To deny one such a right is to violate one’s integrity as a human being. When a conflict of appetites arises, or when appetite conflicts with a real right (such as with abortion), the strongest (i.e., the one with the best legal representation or the most effective propaganda machine) wins.

Hence, consumerism is not simply a function of households spending beyond their means. It is also a function of entitlements, as currently defined and implemented by welfare states. In his scathing indictment of rights-as-entitlements, P.J. O’Rourke was not far from the mark: “Freedom is not … entitlement. An entitlement is what people on welfare get, and how free are they? It’s not an endlessly expanding list of rights — the ‘right’ to education, the ‘right’ to health care, the ‘right’ to food and housing. That’s not freedom, that’s dependency. Those aren’t rights, those are the rations of slavery — hay and a barn for human cattle.” If this sounds harsh and unfair, think about it. These are the rations of a peculiar form of slavery – to an unseen hegemonic power holding the nations in its sway. We are satisfied to eat the crumbs falling from the table of the TCC.

Government-financed “discretionary spending” keeps the boat floating, even when jobs are scarce and salaries are stagnant, and households have maxed out their credit cards. The economies of the consumer countries have for years had their production capacity hollowed out as with numbing regularity jobs have been shipped overseas. This has had the inevitable effect of producing a structural shortfall in purchasing power. This shortfall was first made up for with the real estate bubble of the early 2000s, but since the crash, it has been maintained by massive deficit spending on the part of the Obama administration.

How the pie is divided up, and who gets a seat at the table, now turns out to be a crucial factor behind the identity politics agenda. The government now plays the role of benefactor to various disadvantaged groups, which are encouraged to develop and maintain an identity precisely as disadvantaged groups, in order to form a consumption-based coalition to 1) maintain the power of the ruling elite (in other words, deflect and coopt the class struggle), and 2) maintain demand for below-market global production, thus keeping the gravy train going.

In the current US political constellation, African-Americans are perhaps the key members to be mollified in terms of this “coalition management.” African-Americans have been whipped up into a frenzy of anti-authoritarianism (mainly against the police, but also against the white majority generally) which seemed a bit odd to those of us who thought that the worst aspects of racism were behind us, but who now have almost been led to believe that racism has never been worse. The plot thickens when one realizes that groups like the Ford Foundation and George Soros’s Open Society Foundation have contributed tens, if not hundreds, of millions to the major front group for this movement, Black Lives Matter. Knowing what we now know, it would appear that this is yet another effort to shunt a disgruntled voting bloc away from dangerous activity (such as voting for a presidential candidate who wishes to confront the system as presently constructed, rather than maintain it) and back into the safe confines of identity politics, in which factions vie with each other for favors, rather than with the central power for justice.

The timing of the emergence of the Black Lives Matter movement lends credence to the notion that this agitation has been part of a strategy of coalition management. The death of Trayvon Martin in 2012 can be seen as a watershed in this emergence, for it was soon after that the #BlackLivesMatter hashtag first made its appearance. But it wasn’t until the death of Michael Brown in Ferguson, Missouri, in August 2014 that things became heated. This was followed by the incidents involving Freddie Gray in Baltimore and Eric Garner in New York. By now this has generated an all-out attack on policing specifically and the allegedly racist character of white society generally, with incidents of attacks on both becoming a drearily repeating spectacle.

What is curious about this, again, is the timing. For the so-called “new wave” of immigration began at roughly the same time. Reports of this “new wave” began trickling in in 2013. This new wave of immigrants, bolstered by a massive influx of children (itself spurred by Deferred Action for Childhood Arrivals, President Obama’s 2012 initiative to provide illegal immigrant minors), produced a surge in numbers of new immigrants, both legal and illegal, in 2014 and 2015.

In terms of coalition management, this influx creates problems. The two groups, illegal or unauthorized immigrants and African-Americans, compete for the same jobs and the same benefits from government. That the administration and the Democratic Party is promoting and indeed sponsoring the wave of immigration has the potential to not sit well with existing coalition members like African-Americans, or the working class generally. Therefore, it would seem entirely plausible that, to deflect attention from this conflict, the African-American community has been stoked with allegations of rampant racism, making use of every plausible such incident to reinforce a general narrative that the enemy is not a competing coalition member, viz., immigrants, but the Other, those outside the Democrat coalition, or in other words, whites, conservatives, the police, Christians. This is a matter of speculation; perhaps Wikileaks emails will shed more light on the decision-making process.

Regardless, this is what coalition management  in the age of identity politics looks like.

There is one more aspect that deserves highlighting, and it is connected with the need to maintain consumption levels in Western countries. The phenomenon of mass migration, encompassing both immigration and the influx of Middle Eastern refugees, runs contrary to the national interest of the target countries, and the widespread opposition to the scale with which it is being conducted has fed massive unrest against the ruling class. What is being missed in all of this is that these newly imported populations constitute fresh sources of consumption, regardless of whether employment and thus purchasing power is available for them or not. For in the age of human rights and the welfare state, consumption will be maintained, whether by production or, as we have learned, simply by mortgaging the future through deficit spending to maintain entitlements. All of these migrants can consume much more of that below-market production if they are ensconced in the rich Western countries than if they remained in their countries of origin. In this manner the gravy train keeps chugging along.

This is how we have embarked on the road to Elysium. Debt-funded consumption is combined with structurally low-wage, low-regulation, environmentally-unfriendly production. It is a massive engagement in transactions of decline which unchecked will lead to a situation in which the Elysium of science fiction will increasingly approach reality.

Carrying the Water The Role of the Left in the Neoliberal Order

I am struck with disbelief with the apparently unlimited extent of their smug arrogance. It is these very men (and yes, they are mostly men!) who are singularly responsible for the mess we are in. Blair and Clinton in particular presided over the massive accumulation of debt, reckless deregulation and disproportionate and unbalanced boom in our economy which brought us to the precipice. That they and their ilk imagine that they should now be ‘sorting things out’ is cause for worry. In another time they might have been thrown in the dungeon.[1]

All power tends to coopt and absolute power coopts absolutely.[2]

All in all you’re just another brick in the wall.[3]

“Neoliberalism” is the term used to refer to the most recent form capitalism has taken in the modern world. It is shorthand for the new order gestating since the 1970s, characterized by “extensive economic liberalization policies such as privatization, fiscal austerity, deregulation, free trade, and reductions in government spending in order to enhance the role of the private sector in the economy,” as the Wikipedia entry has it. Such characteristics are explanation enough as to why neoliberalism has become a veritable swearword among left-leaning thinkers.

An article by George Monbiot published in The Guardian succinctly summarizes the left’s case against this Novus Ordo Seclorum. The title says it all: “Neoliberalism – the ideology at the root of all our problems.” Neoliberalism is responsible for everything from the 2008 credit crisis to the epidemic of loneliness to the collapse of ecosystems. At its heart is the unfettered individual in competition with other such individuals, wherein “neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency… Attempts to limit competition are treated as inimical to liberty.”

Although it rose to ascendancy in the 1970s, as an agenda neoliberalism was first put on the map back in 1938 by the throwback Austrian economists Ludwig von Mises and Friedrich Hayek, in the face of a Keynesian onslaught that carried all before it. They and like-minded thinkers, holding fast to the old-school ideal of limited government and free markets, kept to their belief even when it seemed a lost cause. But their perseverance was repaid. With the collapse of the Keynesian consensus in the 1970s, their ideas gained a new lease on life, and with the ascent to power of Ronald Reagan in the US and Margaret Thatcher in the UK, they became the new political-economic orthodoxy.

Then came the harvest. As Monbiot relates: “massive tax cuts for the rich, the crushing of trade unions, deregulation, privatisation, outsourcing and competition in public services.” And not only in these countries but across the globe: “Through the IMF, the World Bank, the Maastricht treaty and the World Trade Organisation, neoliberal policies were imposed – often without democratic consent – on much of the world.”

The “freedom” neoliberalism promises resembles the “equality” pilloried by Anatole France in The Red Lily (“In its majestic equality, the law forbids rich and poor alike to sleep under bridges, beg in the streets and steal loaves of bread”). For what does it entail? In Mobiot’s words, “freedom from trade unions and collective bargaining means the freedom to suppress wages. Freedom from regulation means the freedom to poison rivers, endanger workers, charge iniquitous rates of interest and design exotic financial instruments. Freedom from tax means freedom from the distribution of wealth that lifts people out of poverty.”

And where such freedom is restricted in rich countries, it is transferred to poor ones, “through trade treaties incorporating ‘investor-state dispute settlement’: offshore tribunals in which corporations can press for the removal of social and environmental protections.”

Essentially, neoliberalism has gutted the state, privatized its services to the detriment of all but the owners, reduced through austerity the transfer payments that “lifts people out of poverty,” and legitimized the destruction of the environment.

Martinez and Garcia provide an additional summary of the neoliberal agenda: 1) the rule of the market, 2) cutting public expenditure for social services, 3) deregulation, 4) privatization, and 5) eliminating the concept of the “public good” or “community.” Here deregulation is added to the list of failures, while the eradication of the pursuit of the public good and community parallel Monbiot’s mention of the epidemic of loneliness.

The roster of witnesses could be multiplied, but without adding much. It is a rather bleak and somber picture that the critics of neoliberalism paint. But things are perhaps even worse than they think they are. For in their critique, they advance hardly any new notions beyond the traditional critiques of capitalism that have been leveled since the emergence of the “social question” in the 19th century. It is rather too easy simply to put the blame for the failures and dysfunctionalities of the modern world system at the feet of traditional free-market capitalism. This enemy has been long defeated; things have progressed far beyond such simplicities. Might there be a reason that precisely this obsolete bogeyman is so energetically pressed as the root of all evil? Might it be that such a critique obscures what is really going on, and hides from us the true problem?

For there are realities to the new “neoliberal” order that this critique does not take into account. This is a form of intellectual blindness. And it is being exploited precisely in favor of neoliberalism.

Is neoliberalism simply old-fashioned classical liberalism (i.e., modern conservatism)? To argue as much is to lose sight of some extremely important factoids. One such, as was documented here, is that budget deficits and spending on social programs are not down, but up. Especially in the wake of the credit crisis of 2008, governments in both the United States and Europe have increased deficit spending, not decreased it. Another is that the developed countries still exhibit high, some would consider crippling, levels of regulation. Spending is therefore not going down, and the regulatory state so decried by conservatives shows no sign of being dismantled.

The critique of neoliberalism proffered by Monbiot et al. is quite simply outmoded. It is based on an exclusive focus on the nation-state as the locus of economic and political activity, supplemented by a likewise outdated center-periphery construct of the relations between nations, whereby e.g. the rich Northern nations exploit the poor Southern nations. But that explanatory framework only obscures the true dynamics of the globalist economic system.[4]

We have explored this system in some detail in previous posts (go here for a catalogue of articles). The important thing to glean from those treatments is that the center-periphery framework of exploitation has been superseded by a transnational corporate arrangement that stands over and outside of specific national constrictions and allegiances.

Sklair provides a succinct summary of this arrangement. “[It] is based on the concept of transnational practices, practices that cross state boundaries but do not necessarily originate with state agencies or actors. Analytically, they operate in three spheres: the economic, the political and the cultural-ideological. The whole is what I mean by ‘the global system’…. The building blocks of the theory are the transnational corporation [TNC], [which is] the characteristic institutional form of economic transnational practices, a still-evolving transnational capitalist class (TCC) in the political sphere, and the culture-ideology of consumerism in the culture-ideology sphere.”[5]

At the heart of this system is, then, the TCC, the transnational capitalist class. This group is the major extractor of surplus value in the modern world. In previous posts we have explored the skewed relationships of nations in the current economic framework, characterized by trade deficits run by some countries and trade surpluses by others. We have noted that this arrangement has to be financed by continuous indebtedness, for every trade imbalance has to be financed, and we have asked the question, why allow these imbalances to continue? Who benefits from this deficit consumerism whereby debt piles up with no end in sight? As I put it here:

Qui bono? Not the workers, neither in the exporting nor in the consuming countries. Rather, it is our familiar friend, [Fernand] Braudel’s “shadowy zone” of behind-the-scenes capitalist power brokers, which benefits from its “commanding position at the pinnacle of the trading community” to steer the profits in its direction and the losses to both ends of the trading network. In this arrangement, there is no core and no periphery – there are only regions of exploitation. The difference is in the form the exploitation takes.

Already in 1977 Goldfrank noted the incipient formation of this new group that would become the TCC:

There is growing evidence that the owners and managers of multinational enterprises are coming to constitute themselves as a powerful social class beyond their role behavior: forming interest groups, engaging in common educational and recreational activity, attempting to include top economic managers in the socialist countries (with which trade and joint investments are increasing rapidly), and working out an ideology in which the world is truly their oyster.[6]

Since then, the literature exploring the TCC has burgeoned. One of the leading proponents of this explanatory framework is Leslie Sklair, now professor emeritus of sociology at the London School of Economics. In the article cited (note 5 above), one of the many he has dedicated to the subject, he provides a succinct outline of the characteristics of the TCC (pp. 521ff.):

  1. Outward-oriented, global perspective. “The growing TNC and World Bank emphasis on ‘free trade’ and the shift from import-substitution to export-promotion strategies of most developing countries over the last decade or two have been driven by members of the TCC.” This is accompanied by a globalist orientation in the training of business managers: “There is now a huge literature in the popular and academic business press on the ‘making of the global manager’ and the ‘globalization of business and management’ … confirming that this is a real phenomenon and not simply the creation of a few ‘globaloney’ myth makers.”
  2. Cosmopolitan “citizens of the world.”
  3. Shared lifestyle, including education and consumption patterns (“luxury goods and services”). Members of the TCC enjoy “exclusive clubs and restaurants, ultra-expensive resorts in all continents, ‘the right places to see and be seen’, private as opposed to mass forms of travel and entertainment and, ominously, increasing residential segregation of the very rich secured by armed guards and electronic surveillance, from Los Angeles to Moscow and from Manila to Beijing.”

As a class the TCC is held together by these elements, oriented about a common goal: the exploitation of the possibilities provided by global consumption. “The culture-ideology of global capitalist consumerism is the fundamental value system that keeps the system intact” (p. 523). And so it behooves this global elite to maintain and foster this state of affairs. Sklair refers to this as the siege mentality of capitalism: “The siege mentality entails the view that social systems are always potentially vulnerable to attack, no less from inside than from outside. Approval, and reward for behaviour which sustains it, must be maintained to ensure the persistence of the system” (p. 517).

This is the imperative: the TCC needs to foster the ideology of global capitalist consumption in order to maintain its hegemony. Thus far, it has been quite successful doing so. “The practical ‘politics’ of this hegemony is the everyday life of consumer society and the promise that it is a global reality for most of the world’s peoples. This is certainly the most persistent image projected by television and the mass media in general. In one sense, therefore, shopping is the most successful social movement, product advertising in its many forms the most successful message, consumerism the most successful ideology of all time” (p. 531).

The success of the TCC in propagating this universal ideology meets us at every turn. The question then is, how in blazes have they done it? It is at this point that our argument takes a curious turn. For we have to proceed beyond the usual consumption critiques revolving around the deleterious effects of advertising (manipulation, subliminal messaging), wastefulness (the throwaway society), and the like. There is an added dimension to this newfangled globalist consumerism, the understanding of which unravels many a mystery.

This added dimension was first referenced (to the author’s knowledge) by David Rieff in a celebrated article published in the August 1993 issue of Harper’s Magazine. Entitled “Multiculturalism’s Silent Partner,” it laid bare a hitherto (and still) unrecognized, because improbable, correlation: the “newly globalized consumer economy” has its flip side in multiculturalism.

Rieff begins his analysis with a tantalizing assertion. In the face of universal agreement that Marxism had died with the Soviet Union, he argues that precisely a Marxist hermeneutic explains the current climate of opinion and practice, which by that time was being dominated by the notion of multiculturalism. “For an application if not of the methods of ‘vulgar’ Marxism then at least of those (related) modes of understanding that are to be found on the business pages of the better newspapers might produce a rather more grounded sense of what we are talking about when we talk and talk about multiculturalism. Despite the denials and mystifications of the intelligentsia, multiculturalism is a phenomenon with a silent partner: the broad and radical change now taking place within world capitalism” (p. 62).

The debate about multiculturalism had given the sense that ideas mattered, that what the intelligentsia of either the right or the left, for or against, had to say on the matter would prove decisive to the social order. Rieff pours cold water on the notion. It is not ideas that are driving this debate, he says; rather, it is the new reality of an emergent global capitalist order.

“Reality is elsewhere,” says Rieff.

Can conservatives really believe that a few curriculum changes will undermine a system that could not be weakened by the Comintern or the Soviet Black Sea fleet? As for our campus revolutionaries: How can they insist on the emancipatory power of multiculturalism when during the 1980s – the very decade in which multiculturalism became the dominant intellectual current in elite sectors of academia – the conditions of the poor, of working-class women, and of America’s non-white citizens deteriorated dramatically? If multiculturalism is what its proponents claim it is, why has its moment seen the richest 1 percent of Americans grow richer and the deunionization of the American workplace? There is something wrong with this picture (p. 63).

There is a new game in town, he writes, and multiculturalism is simply an epiphenomenon thereof. “The curiousness of the situation is that both sides have misconstrued the power of multiculturalism in precisely the same way: as a threat to the capitalist system. In reality, it is nothing of the sort, as becomes clear the moment one stops looking at multiculturalism in ideologized, millenarian terms – as if it were some kind of pure, homegrown manifestation of the Zeitgeist – and instead sees it as perhaps the most salient cultural epiphenomenon of an increasingly globalized capitalist system” (p. 63).

To perceive this is to hold in one’s hand the key to understanding some otherwise puzzling phenomena. For instance, the increasingly incongruous nature of university curricula. “Behind the embrace of multiculturalism among college administrators is the belief that there is no incongruity in simultaneously subsidizing an English department made up of feminists and poststructuralists, a physics department that is up to its eye balls in research grants from the federal government, and an enormous (and enormously profitable) quasi-professional sports establishment, complete with athletes who are students only in the technical sense.” The point is, the mentality has changed: “Once administrators have decided that the university will be a kind of department store, then each new course offering becomes little more than another product line, and department chairpersons begin to act like the store’s buyers” (p. 63).

Far from undermining the detested capitalist system, the presuppositions of multiculturalism turn out to dovetail nicely with those of the new corporate mentality. “The multiculturalist mode is what any smart businessman would prefer. For if all art is deemed as good as all other art, and, for that matter, if the point of art is not greatness but the production of works of art that reflect the culture and aspirations of various ethnic, sexual, or racial subgroups within a society, then one is in a position to increase supply almost at will in order to meet increases in demand” (p. 64). Indeed, culture becomes something of a bazaar; and is that not what makes for good business as well?

Instead of being a rare and costly thing, culture becomes simultaneously a product, like a car – something that can be made new every few years – and an abundant resource, like, well, people. The result is that the consumption of culture can increasingly come to resemble the consumption of goods. After all, just as one cannot say that a preference for Pepsi is superior to a preference for Dr Pepper, what is euphemistically known as “cultural pluralism” permits a similar abdication of judgment in matters of artistic taste. The rules of the market are soon in full control. If students want to read Alice Walker in a literature class instead of the Iliad, fine. The publishing industry certainly has no qualms. It knows it can market Walker more savvily than it can market the Greeks. At any rate, it is not a case, as conservatives allege, of the student as barbarian. Rather, it is a case of the student as customer. And in our society – and, increasingly, most societies – the customer is always right (pp. 64-66).

It is not only students and department heads that are affected by this; professors are as well. The radicals turn out to have found a comfort zone in the new material order, even if that clashes with their professed beliefs.

For all their writings on power, hegemony, and oppression, the campus multiculturalists seem indifferent to the question of where they fit into the material scheme of things. Perhaps it’s tenure, with its way of shielding the senior staff from the rigors of someone else’s bottom-line thinking. Working for an institution in which neither pay nor promotion is connected to performance, job security is guaranteed (after tenure is attained), and pension arrangements are probably the finest in any industry in the country – no wonder a poststructuralist can easily believe that words are deeds. She or he can afford to (p. 66).

Indeed, words offer another telltale sign of confluence. Rieff cites an article by “new historicist” professor Janet Nedelsky in which she writes of the need to do away with boundaries because boundaries indicate, in her words, “a separation and opposition that does not capture the complex, fertile, and tension-laden interconnection between self and others.” But isn’t it curious that this viewpoint regarding boundaries coincides with e.g. Larry Hirschhorn and Thomas Gilmore writing in the Harvard Business Review about the new ideal: the “corporation without boundaries.” Why is the one radical and the other not? In fact, they are equally so.

The more one reads in academic multiculturalist journals and in business publications, and the more one contrasts the speeches of CEOs and the speeches of noted multiculturalist academics, the more one is struck by the similarities in the way they view the world. Far from standing in implacable intellectual opposition to each other, both groups see the same racial and gender transformations in the demographic makeup of the United States and of the American work force…. [B]oth CEOs and Ph.D.’s insist more and more that it is no longer possible to speak in terms of the United States as some fixed, sovereign entity. The world has moved on; capital and labor are mobile; and with each passing year national borders, not to speak of national identities, become less relevant either to consciousness or to commerce (pp. 67-68).

Rieff goes so far as to say that it is business, not the radicals, that is having the more practical effect implementing a multicultural agenda. “The multiculturalists may pride themselves on posing a fundamental threat to what Professor Henry Giroux has called ‘the hegemonic notion that Eurocentric culture is superior to other cultures and traditions by virtue of its canonical status as a universal measure of Western civilization.’ But the reality is that no serious player in the business world has anything but the most vestigial or sentimental interest in Western civilization, as it is roughly understood by campus radicals and conservatives alike.” When everything is submitted to the market for valuation, then all values become relative. The business community has embraced this relativity. “The market economy, now global in scale, is by its nature corrosive of all established hierarchies and certainties…. If any group has embraced the rallying cry ‘Hey, hey, ho, ho, Western culture’s got to go,’ it is the world business elite” (p. 69).

The result may not be what the idealists had in mind. The brave new world of global consumerism is a far cry from visions of egalitarian, environmentally friendly utopia. “The collapse of borders, far from being the liberating event that the academic multiculturalists have envisaged, has brought about the multiculturalism of the market, not the multiculturalism of justice. And if there is a mystery about all this, it is that so many people could have expected a different, more ‘enlightened’ outcome” (p. 70). Nevertheless, it is the reality of the borderless world in which we have landed.

What is revealing is how academics, the proponents of a supposed anti-capitalist alternative, have fallen so easily into line with this “multiculturalism of the market,” ruled as it is by the corporate business world.

Campus radicalism is awfully selective anyway. Its talk is long on race and gender, short on class. And that is probably just as well, since the market economy, ready though it may be to admit blacks and women, is hardly likely to sign its own death warrant by accepting a radical revision of class relations. Were such proposals to be seriously advanced, on campus or elsewhere, the multiculturalists would soon discover just how tough capitalism can be when its real, as opposed to its sentimental, interests are threatened (p. 71).

Indeed, it is in their economic interest to do so. “That is the beauty of the academic multiculturalists’ approach: they can appear to be radical and can feel themselves to be radical, but they can advance a program that, stripped of its adorning rhetoric, is little more than a demand for inclusion, for a piece of the capitalist pie” (p. 71).

This is more than just coincidence. There is more than just a correlation between multiculturalism and globalist corporate capitalism, between the corporate elite and the academic elite. There is in fact the “Marxist” connection to which Rieff refers in his article: the illusion clung to by the left and its intelligentsia that it calls the shots in this culture war, when in reality it is only carrying the water for the global corporate regime.

Rieff makes this clear with a pertinent comparison.

The rise of multicultural capitalism is comparable to abolitionism: the slaves were freed when the abolitionists could count on the support of economic interests in the North, for which an economy based on slavery was an impediment to the future economic well-being of the United States. It was industrial civilization, not justice, that the hardheaded plutocrats of New York and New England were interested in furthering. And until they were convinced that their own interests were at stake, all the oratory of Frederick Douglass, Henry Ward Beecher, and their colleagues was for naught. After they were convinced, this same oratory seemed to sweep all before it (pp. 70-71).

“Seemed to.” It is all so quintessentially Marxian. The economic is the “base,” the intellectual is the “superstructure,” a framework that, “for all their professed respect for the Marxist tradition,” is “out of favor” with the multicultural intellectuals. As well one might expect, given the underlying reality.

This economic base is more than just an abstraction, a Marxian construct. It is the source of funding for the entire academic enterprise, and not only that, for the myriad of activities that impinge upon and determine the direction of the broader culture.

Here we hear echoes of Sklair’s contention that the TCC exerts great effort in gaining and maintaining its hegemony. In fact, we see looming before us one of the ways in which it concretely does so. Another article from the 1990s, in another leading journal of opinion, the New Republic,[7] sheds light on this.

In this article, David Samuels charts a peculiar shift in orientation on the part of the leading foundations. Now foundations are the number one vehicle by which the wealthy influence public policy and the direction of “civil society.” Beginning with the Rockefeller Foundation in 1913, they have had great influence on the development of law, politics, education, and culture. But Samuels notes a shift in foundations’ emphasis, away from broad cultural initiatives and towards narrow advocacy. “Where the Ford Foundation of the 1950s and ’60s spent its money on efforts to promote writing and scholarship at major universities and on symphony orchestras and ballet companies in dozens of American cities, Ford today spends its money on arts projects designed to ‘promote tolerance and social understanding’ and ensure ‘access and equity.’… In the past twenty-five years … a startling shift in foundation funding has occurred, away from research and toward the support of advocacy groups.” This narrow focus has been bolstered by an uncritical atmosphere in which foundation leadership, itself wedded to a multiculturalist agenda, no longer pursues a broad agenda of what once was known as the public interest. It has become a narrow world of its own, without critical openness. “Over the past twenty-five years, the men and women who staff America’s major foundations have become a tight-knit world unto themselves…. The preponderance of foundation grants to advocacy groups … suggests that foundations are less devoted to the reasoned pursuit of the public good than to the multiculturalist dogmas propounded by their staff.”

What could be behind such a shift? Is it that foundations, and the corporate interests behind them, have become wedded to this form of idealism? Are they selflessly pursuing the agenda of “inclusion” and “diversity”? Or is this an expression of Rieff’s base-superstructure relation?

Another critic of foundations and their influence, Joan Roelofs, sheds light on the motivation behind the corporate interest’s advocacy of this agenda. Her critique is rather to the point. “Almost all progressive organizations look to corporations and foundations for funding…. These liberal foundations are closely tied to political and economic elites. Their original founders were wealthy capitalists, and their current trustees and senior staff have close ties to the corporate world. Furthermore, their investments are in the usual high earning corporations…. We are not arguing that foundations are ‘all powerful,’ but rather that their power is enormous, and rarely revealed by scholars, journalists, or activists….”[8]

Foundations, as mentioned earlier, are a prime vehicle through which the corporate elite exercises hegemony. They are used to deflect, defuse, and coopt otherwise dangerously subversive or even revolutionary movements. “Foundations are not opposed to social change, but regard it as necessary and do not see it forthcoming from the political process…. The liberal foundations seek to direct change in a way that will not disturb the wealth and power of corporate elites and the hegemony of the United States” (p. 658). They do so in a myriad of ways. “They are gatekeepers for academics in all fields…. Foundations exert even more direct influence by co-opting activists and their organizations…. The radical activism of the 1960s and 1970s was often transformed, by grants and technical assistance from liberal foundations, into fragmented and local organizations subject to elite control” (p. 662).

As it turns out, multiculturalism, identity politics, and the emphasis on diversity and inclusion are rather convenient ways to attain this end. “Dissidence is fragmented through the creation of organizations for blacks, Hispanics, gays, lesbians, the disabled, Native Americans, and even poor people, who are considered just another minority in need of rights. Foundations have created and funded litigation organizations…. In the early 1970s, the Ford Foundation began to fund women’s studies research centers and academic programs; similar efforts resulted in institutions for other disadvantaged groups. Social movement activists are thereby transformed into researchers, managers, and litigators; and movements are fragmented into ‘identity politics.’”[9]

The strategy of splintering potentially disruptive populations into isolated identity-groups with accreditation in the political process serves to shunt these groups toward the relatively harmless activity of demands for “inclusion,” as Rieff put it, “a piece of the capitalist pie.” Because this does not bring the system itself into question – something which used to be the left’s raison-de-être.

Foundation ideology attributed the radical protests to defects in pluralism. The pluralist ideology holds that any interest is free to organize and to obtain benefits from the system, through peaceful processes of compromise. Disadvantaged groups… needed help in obtaining their rights. Grant money would enable them to participate in the interest group process on an equal basis with the more advantaged groups, and then they would no longer waste their energies in futile disruptive actions…. Poverty, militarism, racism, and environmental degradation are not by-products of the economic system or related to each other. They are merely defects to be corrected through the pluralist political process (p. 31).

What we have here is an ongoing, full-court press, which has been pushing the multicultural agenda during precisely the identical time-frame that the globalist corporate system was being established and expanded – which is, since the 1970s, and especially the 1980s. This is more than coincidence. As Brandt points out, “The Ford Foundation began supporting feminist groups and women’s studies programs in the early 1970s. Just ten years earlier they were busy training Indonesian elites (using Berkeley professors as instructors) to take over from Sukarno, which occurred soon after a CIA-sponsored coup in 1965 that led to the slaughter of hundreds of thousands. Did the folks at Ford Foundation have a bleeding change of heart, or are they continuing the same battle on another front? It would appear to be the latter.”[10]

No, it is not a change of heart, but a change of plan. The TCC means business, and it has for a long time. And its strategy is astoundingly effective. “The ruling elite are experts at manipulating their own interests; they know how to divide and conquer, which is why they continue to rule. As inequality becomes increasingly obvious, those who are less equal begin to see society in terms of ‘us’ and ‘them.’ The dominant culture shades this definition by using the mass media to emphasize our differences at every opportunity. Conventional wisdom becomes articulated within narrow parameters, which is another way of saying that the questions offered for public debate are rigged.”[11]

We are being played, not in the interests of “U.S. hegemony,” as Roelofs supposes, but transnational hegemony, TCC hegemony. We are being splintered into antagonistic identity groups, the better to control us. “The objective is to define ‘us’ and ‘them’ in ways that do not threaten the established order. Today everyone can see that there is more Balkanization on campus, and more racism in society, than there was when affirmative action began over twenty years ago. And for twenty years now one can hardly get through the day without being reminded that race is something that matters, from TV sitcoms all the way down to common application forms (it would have been unthinkable to ask about one’s race on an application form in the 1960s). We are not fighting the system anymore, we’re fighting each other.”[12]

But our problem is not so much discrimination, racism, and the like, but lack of opportunity generally, the byproduct of a system that wishes to hide that very fact. We are being pitted against each other in order to obscure this fundamental underlying reality. That lack is the result of a globalized economy structured in such a way as to squeeze genuine economic opportunity even as it proffers the consolation prize of limited redistribution of wealth and opportunity.

“Transnational accumulation” is what it’s all about; for the rest, let them eat cake. For “none of these dire trends are of any concern to the ruling elites who have the power to address them. They are citizens of the world, and no one – now not even the Soviet bloc – stands in their way. They have no need for borders; free trade is what they want and what they will eventually get. Many on Wall Street prefer unrestricted immigration, which would drive down wages and fold up our few remaining unions. For ruling elites, private security provides insulation and ‘social decay’ is just an irrelevant phrase.”[13]

Does that sound like it was written during the election cycle of 2016? It does – but it dates from 1993! This has been going on for quite a while – and we haven’t even been aware of it. And in this context, the notion of La Trahison des Clercs takes on a whole new meaning. “The campus left speaks of equality, and then forgets about justice by ignoring economic and class distinctions. This failure is so fundamental that multiculturalists should no longer be considered ‘leftists.’ As long as they claim this description, some of us – those who still feel that elites ought to be accountable – are beginning to feel more comfortable as ‘populists.’”[14]

Speaking of the election cycle, it did at last seem as if the left had regained some of its lost resolve, its sense of mission. The candidacy of Bernie Sanders provided a rallying point about which the critics of the system could gather. And there was no shortage of criticism of the leading candidate for the Democratic Party, Hillary Clinton, precisely in terms of a critique of neoliberalism. For Clinton was viewed as the candidate of the ruling class.

In their article entitled “Hillary Clinton’s Empowerment”[15] (subtitled “Hillary Clinton isn’t a champion of women’s rights. She’s the embodiment of corporate feminism”), Kevin Young & Diana C. Sierra Becerra explore the Clinton candidacy in the light of Clinton’s close ties to the corporate business world.

As first lady, Clinton had a significant impact on policy. “Clinton became perhaps the most active first lady in history. While it would be unfair to hold her responsible for all of her husband’s policies, she did play a significant role in shaping and justifying many of them. In Living History she boasts of her role in gutting US welfare: ‘By the time Bill and I left the White House, welfare rolls had dropped 60 percent’ — and not because poverty had dropped. Women and children, the main recipients of welfare, have been the primary victims.” President Clinton’s crime bill was similarly eye-popping from a progressive perspective. “Clinton also lobbied Congress to pass her husband’s deeply racist crime bill, which, Michelle Alexander observes in The New Jim Crow, ‘escalated the drug war beyond what conservatives had imagined possible,’ expanding mass incarceration and the death penalty.”

Of course now Mrs. Clinton is campaigning as if both welfare reform and a tough-on-crime policy were uniquely Republican (racist! sexist!) policy positions. What she does not point out is her own role in putting them in place.

But the real criticism focuses on her years as senator from New York (2001-2009) and secretary of state (2009-2013), during which “her promotion of US corporate profit-making and her aggressive assertion of the US government’s right to intervene in foreign countries” were the two defining features. Young and Becerra quote Bloomberg Businessweek’s assertion that “Clinton turned the State Department into a machine for promoting U.S. business,” seeking “to install herself as the government’s highest-ranking business lobbyist.” They cite her article in Foreign Policy in 2011 which “speaks at length about the objective of ‘opening new markets for American businesses,’ containing no fewer than ten uses of the phrases ‘open markets,’ ‘open trade,’ and permutations thereof.” In that article Clinton champions the Trans-Pacific Partnership (TPP): “Like Bill Clinton’s North American Free Trade Agreement, the deal is intended to further empower multinational corporations at the expense of workers, consumers, and the environment in all countries involved. Lower wages and increased rates of displacement, detention, and physical violence for female and LGBT populations are among the likely consequences, given the results of existing ‘free trade’ agreements.”

They further detail her penchant for militaristic intervention in foreign countries, and cite “neoconservative” Robert Kagan as to her likely policies should she be elected. “‘I feel comfortable with her on foreign policy,’ Kagan told the New York Times last June. Asked what to expect from a Hillary Clinton presidency, Kagan predicted that ‘if she pursues a policy which we think she will pursue, it’s something that might have been called neocon.’ But, he added, ‘clearly her supporters are not going to call it that; they are going to call it something else.’”

Actually, they call it “experience and exposure,” or as Michelle Obama recently put it, “No one in our lifetime has ever had as much experience and exposure to the presidency, not Barack, not Bill, nobody…. And yes, she happens to be a woman.” (Appeal to gender – check!)

Young and Becerra quote Middle East scholar Stephen Zunes, that while “‘Hillary Clinton has been more outspoken than any previous Secretary of State regarding the rights of women and sexual minorities,’ this position is ‘more rhetoric than reality.’”

Given Clinton’s backing of neo-liberal economic policies and war-making by the United States and its allies, her advocacy of women’s rights overseas . . . may have actually set back indigenous feminist movements in the same way that the Bush administration’s “democracy-promotion” agenda was a serious setback to popular struggles for freedom and democracy. . . .

Hillary Clinton’s call for greater respect for women’s rights in Muslim countries never had much credibility while US-manufactured ordinance is blowing up women in Lebanon, Gaza, Iraq, Afghanistan and Pakistan.

The bottom line is, Clinton is a representative of what we have now come to recognize as the TCC. The Clinton Foundation and its various branch activities has ensconced the Clintons firmly in the world of “philanthrocapitalism” with its hegemonic functionality within the global system. The influence peddling which seems to be at the heart of the Clinton email controversy should be seen in the context of this brokerage functionality, mediating relations between the TCC and government. Similarly, the $21 million earned by giving speeches to various corporate, banking, and Wall Street entities since leaving the State Department, and the $153 million total for speechmaking since 2001, are part and parcel of this linchpin functionality within the global system. As I noted in a previous article, Hillary Clinton is the “poster child” of that system.

And what of her opponent in the current election? Whatever one may say of Donald Trump, no one has said that he represents the corporate elite. Quite the opposite. Of course, reality may be otherwise. Were he to be elected, he might turn out to be cooptable as well.

Be that as it may, one thing has become clear. The culture war may have been won by the left, but it was won because the corporate world got behind it and indeed coopted it. This means that progressives should recognize their role within the global system. For given this understanding, the categories “right” and “left” have lost all meaning.

The tragedy in all of this: it is not a matter of right versus left, but top versus bottom. “The ruling elite that finds diversity useful is an elite operating at a level which transcends right and left…. Nothing shows this better than the fact that this ideological right has always been as concerned as the left over the real source of power, the elite globalists…. It’s not a right-left problem, but rather a top-bottom problem.”[16]

And yet the left is so easily egged on to do the dirty work: vituperate conservatives and champion the poster child of the TCC simply because she, as her husband before her, has mastered the art of shifting the blame for all ills to unpopular political opponents. This seems to be the role the left plays within this neoliberal order.

That is why I used the word “role” in the title of this article. To have a role to play is to be put into a particular position in order to perform a particular, scripted, function. It is allocated by whoever is in control of the situation. In other words, the left plays the role set for it by the powers that be, in this case the TCC. And as can be seen in this election cycle, it does so with alacrity, as if the surface phenomenon of a left-versus-right confrontation were the only reality. When the real reality is that this is only an epiphenomenon. The real reality determining the roles and the dance is that of a transnational capitalist hegemony that is busy turning the world into a surplus value yielding colony. The multiculturalist, diversity-oriented agenda in the end turns out to be just another brick in the wall.


 

  1. Rodney Schwartz, “Philanthrocapitalism and Davos make Me Sick!”, ClearlySo Social Business Blog, 5 February 2009.  
  2. Alasdair MacIntyre, After Virtue: A Study in Moral Theory (Notre Dame, IN: University of Notre Dame Press, 19842), p. 109.
  3. Roger Waters (Pink Floyd), “Another Brick in the Wall,” The Wall, 1979.
  4. For a concise criticism of this construct, see William I. Robinson, “The transnational state and the BRICS: a global capitalism perspective,” Third World Quarterly, Vol. 36 No. 1, 2015, pp. 1-21.
  5. Leslie Sklair, “Social movements for global capitalism: the transnational capitalist class in action,” Review of International Political Economy, Vol. 4 No. 3, 1997, p. 520.
  6. Goldfrank, W., “Who rules the world? Class formation at the international level,” Quarterly Journal of Ideology, Vol. 1 No. 2, 1977, p. 35.
  7. “Philanthropical Correctness: The Failure of American Foundations,” The New Republic (September 18 and 25, 1995), pp. 28-36.
  8. Joan Roelofs, “How Foundations Exercise Power,” American Journal of Economics and Sociology, Vol. 74, No. 4 (September, 2015), pp. 655, 657, 658.
  9. Roelofs, Foundations and Public Policy: The Mask of Pluralism (Albany, NY: State University of New York Press, 2003), p. 25.
  10. Daniel Brandt, “Multiculturalism and the Ruling Elite,” NameBase NewsLine, No. 3, October-December 1993.
  11. Brandt, “Multiculturalism and the Ruling Elite.”
  12. Brandt, “Multiculturalism and the Ruling Elite.”
  13. Brandt, “Multiculturalism and the Ruling Elite.”
  14. Brandt, “Multiculturalism and the Ruling Elite.”
  15. In Jacobin, March 9, 2015. Available here.
  16. Brandt, “Multiculturalism and the Ruling Elite.”

The Mystery of Capital in Context

Given the rancorous debate unleashed by the UK electorate’s decision to depart the European Union – in particular, regarding the damage to the UK economy that independence might bring – it seems wise to re-examine the foundations of economic prosperity and its relationship to political and legal factors. I do so by examining Hernando de Soto’s seminal book, The Mystery of Capital, which goes to the heart of the relationship between political framework, legal framework, and economic development.


The “mystery of capital” is the intriguing title of one of the most important books of the new millennium. Written by the Peruvian economist Hernando de Soto, it breaks with the tradition of dealing with capitalism as a system established of, by, and for the rich, by looking at it from the bottom up: from the lowest levels of society. De Soto finds capitalism even at that level, albeit in a stage of dormancy, as it were. His treatise is intended to help us understand that capitalism is nothing esoteric – despite its being a “mystery” – but rather something down to earth, active in the lowest levels of society, and only waiting for a proper legal and political framework to become an equitable system, in the service of all, not just the well-to-do.

De Soto first made a name for himself with his path-breaking work in Peru, which culminated in the best-selling book The Other Path. In order to show an alternative route to a better society, De Soto developed a unique investigative method. At the time – the 1980s – the better society was being promised by radical revolutionary groups. In Peru, such a group was El Sendero Luminoso, the “Shining Path” – the path to the enlightened society, the workers’ paradise. Officially, this was the Communist Party of Peru, and throughout the 1980s it engaged in violent revolution. De Soto proposed El Otro Sendero, the “other path,” which would render the revolution irrelevant by integrating the real-world economies of the poor within an all-embracing economic framework that left no one out.

What De Soto and his colleagues at the Institute for Liberty and Democracy had discovered was that, at the poorest and most basic levels of society, a vibrant economy was already in existence. It functioned in spite of, rather than because of, the formal institutional and legal structures provided by the state. For in Third-World countries such as Peru, there was not one economy but two: the formal economy, the economy of the wealthy and middle class, connected with the rest of the world; and the informal economy, the economy of the poor, the “off the books” economy, comprising the residual and peripheral denizens who happened to make up the vast majority of the nation. Essentially, the legal and political institutions functioned within and for the benefit of the formal economy, while the informal economy ran on its own, ignored and neglected by the powers that be, kept by the phalanx of rules and regulations from ever graduating from the shadows into the sunlight of the economy proper.

De Soto’s book highlighted this situation and the potential that it held, if it could be harnessed, both for the benefit of the poor and for the nation as a whole. Mainly, the regime of bloated regulation and official corruption needed to be exchanged for the rule of law, specifically the institutions of property and contract. If this would occur, the chains would come off of the poor and they could become full-fledged participants in a functional rather than dysfunctional social order.

De Soto’s second book, The Mystery of Capital, is the culmination of the work done in the wake of, and building on the foundations laid in, The Other Path. It is the product of the transfer of the method pioneered in Peru into many other Third World countries facing similar problems. De Soto took his show on the road, making the Institute for Liberty and Democracy into a globally active entity.

Unlike The Other Path, however, The Mystery of Capital is more than an exposition of the findings of investigative field work. In fact, it transcends the empirical method altogether: it sets forth a philosophical outworking that is both result and foundation of those empirical findings.

In making this leap from practice to theory, De Soto had penned a most important book on the subject. He was enabled to do this precisely because of the empirical basis: the book went beyond economic theory to the real world in which economic practice is embedded, a world that economic theory studiously ignores; it takes into account the real-world framework within which economies function.

The recognition of the two-tiered economy led De Soto to perceive the crucial importance of the legal system. For in his findings, it was the legal system that made the difference between the two economies. This led him to explore virtually virgin territory: the relationship between the legal system and the economy has been largely ignored, except for certain specialty (and rather idiosyncratic) disciplines such as institutional economics, “new” institutional economics, and law and economics. While these latter disciplines have not been entirely fruitless, they have not helped to rework economic theory the way that De Soto had done in his book.

De Soto’s reworking of economic theory starts from a rather crucial distinction that is well known to legal philosophers, the distinction between possession and property. This is a staple of the Western legal tradition (both civil and common). Essentially, the difference between possession and property is physical versus mental – possession is physical holding, while property is an entitlement that stays in force regardless of whether the owner is in physical possession or not. And this distinction depends on a functioning legal order that enforces its arrangements. With possession, enforcement is essentially left to the possessor; with property, it is maintained by a separate entity charged with law enforcement, and hence is not dependent upon the physical strength of the owner in order to enforce possession.

With property arrangements, then, the relations of people and things are elevated to a higher plane than arrangements of pure possession. And they provide for higher-order exploitation of resources than simple possession does. For one thing, property rights can be split up and farmed out any number of ways. For another, property allows for encumbrance in credit contracts, whereby the property item serves as collateral. Without changing its physical status, the encumbered asset engenders a new set of economic advantages. The owner can borrow money against it; and, as Steuart showed back in the 18th century and Schumpeter in the 20th, this is essentially the way in which, in the modern world, money comes into being. At least, in a banking- as opposed to a coinage- or scrip-based system. Credit and debt are the source of money issue. As any bank balance sheet will show you, all money issued has as its counterpart an encumbered economic asset.

In his book, De Soto never explicitly refers to the legal doctrine of possession vis-à-vis property, but despite that, it underlies his entire exposition. He argues that it is the legal system that enables possessions to become property, thus assets, and assets to become capital – resources capable of generating new productivity and income. “Like electrical energy, capital will not be generated if the single key facility that produces and fixes it is not in place. Just as a lake needs a hydroelectric plant to produce usable energy, assets need a formal property system to produce significant surplus value. Without formal property to extract their economic potential and convert it into a form that can be easily transported and controlled, the assets of developing and former communist countries are like water in a lake high in the Andes – an untapped stock of potential energy.”[1]

De Soto’s argument is crucially important – as far as it goes. But it runs into problems when he goes further and highlights a single aspect of the legal system, to which he attributes excessive importance. This in turn causes him to lose sight of other aspects, and indeed, the bigger picture.

De Soto emphasizes the role of record-keeping as the determining factor in creating a cognitive layer overlaying the physical layer of tangible things. Records, titles, data storage and retrieval, allow the things that otherwise exist in isolation to be integrated together into a collective mind map, by which they become a synergistic whole that is greater than the sum of the parts. For De Soto, this is the crucial element of a system of property rights, which enables it to generate productive economic assets – capital.

But this is to overplay his hand. It is not so much record-keeping within a framework of law, but the framework of law itself that is the important thing. The key is the establishment of common law: a law that is valid across the board across the entire territory, which holds for everyone and which establishes at its core, property rights and freedom of contract, uniformly and equally enforced. Historically, this kind of common law was established early on in England, where the king’s writ came to run everywhere. Which is why England became the common-law country par excellence.[2]

Such an establishment of common law, in turn, depends upon the consolidation of sovereignty.

Sovereignty is the power by which the rule of law is established. It is the prerequisite of a functioning legal order. Sovereignty is the power to establish and confirm shared, social value. It does this through legislation and adjudication, establishing laws as standards by which the social order is ruled – the rule of law. These, then, are values, which are universally valid and binding.[3]

But there is more to the establishment of value than this. Valuation has, of course, an economic dimension as well as a juridical one. But does the legal system generate economic value? Yes it does, through the utilization of property and contract. And here we have the intangible, mental, symbolic dimension of the economy that De Soto intuits, but does not quite elucidate, given his focus on record-keeping. Property and contract generate value by the process of credit and debt. When property is harnessed as collateral in a credit contract, it is valued; and this valuation is expressed in the issuance of a monetary equivalent. A deposit is established at the bank, in the equivalent of the loan. Borrowing a metaphor from the days of minting coinage, Steuart called this the “melting down” of property into “symbolical” money. Hence, the regime of property and contract participate in the process of valuation in a very critical way. And out of this valuation comes capitalization – capital.

Now then, the context of this valuation and process issuing forth ultimately in that mysterious entity, capital, is a common legal order, the product of a consolidated and viable locus of sovereignty. Sovereignty, then, enables this whole process of capitalization to take place. What is the locus of sovereignty? Following the German Calvinist statesman and political philosopher, Johannes Althusius, we can answer unambiguously, the nation.[4]

The Industrial Revolution, the “take-off,” as W.W. Rostow put it, did not come about in a vacuum. It came about in nations in which sovereignty had been consolidated; and those nations in which sovereignty had not been consolidated, did not experience it. Nationhood and sovereignty go together. Like a lens out of focus, sovereignty is weak where it does not shine through the prism of nationhood. And, where sovereignty is weak, there also a domestic economy does not materialize; as a result, conditions are rife for an exploitative, colonial or neo-colonial framework. Wallerstein’s center-periphery framework then looms large. None of that is necessary for economic growth: in fact, it only benefits particular interests, at the expense of broad-based, populace-elevating economic growth.

So then, it is sovereignty refracted through nation-states that has enabled the genesis of the capital which De Soto seeks to demystify. Summarizing this state of affairs, I wrote: “Through the institutions of property and contract, credit and debt, the asset base in man (human capital) and through man (tangible and intangible property) becomes capitalized, generating a money supply which, when properly maintained, is the faithful representation of that asset base, no more and no less. The nations of the world have no need of a Wizard of Oz to grant them prosperity. It is in their hands to do so, if they would only recognize it.”[5] That is the mystery of capital explained. In its fullness, only nations can bring it off. Neither inchoate peoples, nor empires, ever have, or ever will.


[1] Hernando De Soto, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else (New York: Basic Books, 2000), p. 48.

[2] For more on this point see my book Common Law & Natural Rights (Aalten: WordBridge, 2009), pp. 68ff.

[3] For more on this point see my book Common-Law Conservatism: An Exercise in Paradigm-Shifting (Aalten: WordBridge, 2007), ch. 1.

[4] For more on this point see this previous post.

[5] Follow the Money, p. 190.