Capitalism and the Illusion of Democracy

Something to consider while suffering through the daily barrage of fabulist blather from Donald Trump is that if the Democrats thought it would benefit their cause, they would be putting Joe Biden front and center to counter this pain. That they aren’t suggests that they understand exactly how politically tenuous Mr. Biden is. In turn, that Joe Biden is their choice suggests that all isn’t what it could be in duopoly-party land. And coming in the midst of serial trillion-dollar bailouts, capitalism is looking a bit iffy as well.

To clarify, the point of this piece isn’t to debate the relative merits of Team Red versus Team Blue. It is to consider why this pairing is the best that late-stage capitalism has to offer. Others who care can dwell on the policy specifics of Mr. Trump’s rewrite of NAFTA versus Mr. Biden’s support for the original. The question in need of an answer: is this election evidence of a broken political system, or is ‘our democracy’ working exactly as the duopoly parties and the oligarchs they serve want it to work?

There is a Grand Canyon-sized disconnect between popular understanding of electoral politics— ‘democracy,’ and its role in capitalist political economy. While this may seem self-evident to many readers, party affiliations and class hegemony have been quite effective at muddying the waters. Within electoral logic, politicians work to garner votes, not to illuminate the constraints imposed by the two-party and state capitalist systems. But it is the latter that determine electoral outcomes through control of the process, not voters.

In the modern era, Jimmy Carter, Ronald Reagan, Bill Clinton, Barack Obama and Donald Trump all ran as political outsiders and won. And all supported the interests of capital and the further consolidation of political choice upon entering office. Were this the result of democratic mandate, so be it. But the fact that each became a political insider— not just in that they entered office, but in terms of whose interests they represented, suggests that electoral politics isn’t where important political choices are made.

An allegory of sorts can be found in corporate statements of guiding principles. Monsanto’s Code of Business Conduct, ExxonMobil’s Standards of Business Conduct and Goldman Sachs’ Code of Business Conduct and Ethics all abhor racial and gender discrimination and support diversity, inclusivity, LGBT rights and personal self-realization. As articulated, these liberal values are part of the belief system of the professional class and the American left. And they have been given legal backing through anti-discrimination laws.

They are also wholly irrelevant to how these firms conduct their businesses. Representing different industries— agriculture, oil and gas and finance, these Codes represent a corporate ‘view’ that is part moral self-flattery, part appeal to group (‘shared’) values, and part legal preemption and self-defense. However, few describing these businesses would think to include the stated principles in a description of what they do. They are beliefs that are unrelated, except in very narrow circumstances, to actions.

Through the ‘revolving door’ of employment between government rule-making and corporate profit generation, large, multinational corporations are the Federal government. This isn’t simply a matter of who sits where. Monsanto writes agricultural and food policy; ExxonMobil writes energy and foreign policy and Goldman Sachs writes financial policy for the Federal government. And when they don’t write policy directly, Congress is good at taking dictation.

That these companies are also among the more destructive forces in human history carries with it moral and political content. Monsanto produces the carcinogenic pesticide Roundup, the neonicotinoid pesticides contributing to mass extinction and inadequately tested GMO seeds. ExxonMobil is a central actor causing climate change while funding climate change denial research. Goldman Sachs is known as ‘Government Sachs’ for its outsized role in crafting and profiting from government regulatory and financial policies around the globe.

Each represents its respective industry in the American corporate model of controlling all sides of the transactions they participate in. They do so under the cover of buying and selling in ‘free’ markets. As with the choice between duopoly party candidates, ‘markets’ in this case are the end of an economic process, not the beginning. These corporations use state and state-granted power— military, monopoly, legal, structural, and historical, to obtain resources on the cheap, eliminate competitors and control markets.

Many of the people working for these corporations, particularly those in leadership positions, believe in the liberal values espoused in the corporate Codes, even though they have no bearing on how business is conducted. This dualism finds #Resistance liberals living in racially segregated neighborhoods while sending their children to racially segregated schools. The same is true of corporate hiring. ‘Qualifications’ are a proxy for class— and through it race, that provide an empirical rationale for ‘legitimate’ discrimination.

Interpreting political outcomes by what politicians and / or corporate leaders say, rather than what they do, is the flip side of separating beliefs from actions. Because the role of the Democrats in the duopoly system is to feign having principles (keep reading) —they use the equivalent of corporate Codes to sell their political programs. For instance, Barack Obama hailed an EPA program to close coal fired utilities in the U.S. as an environmental victory even as he sold the unused coal to China.

Hypocrisy isn’t the point here. The social mechanisms that separate what political actors believe from what they do are. The currency of these corporations is power. Each have legal, tax, regulatory and lobbying departments that are as central to their businesses as those that produce their nominal products. The revolving door illustrates the merging of state with corporate power. Likewise, corporations are considered extensions of state power, hence the relation of trade and trade agreements to foreign policy.

The economists have this relationship perfectly backwards. Capitalist / neoliberal theory has it that markets are democratic in the sense that market outcomes are the product of exchange free from coercion. However, corporations exist to accumulate coercive power. As with state capitalist and duopoly party control over electoral choices, asymmetrical power makes markets the end of a political process, not the beginning. The relevant choices are made long before products are available in markets.

This model of controlling all aspects of ‘markets’ finds it analog in electoral politics. At a basic level, elections are competitions between particular politicians (‘markets’). Taken up a level, they are competitions between the duopoly political parties. The systemic outcomes of political races are determined through party machinations and commitments of resources. This is to argue that the duopoly parties control access to political participation.

Taken up another level still is a unified commitment to the form and function of political economy— in the case of the U.S., state capitalism. Nancy Pelosi and Donald Trump both describe the U.S. as capitalist. But such descriptions are unnecessary. To understand this hegemonic role, ending capitalism would be ‘political,’ but serving it isn’t perceived as such. State capitalism is the political economy in which the duopoly parties operate.

The practical effect is that seemingly disparate politicians with different party affiliations provide political and economic continuity through what is posed as political difference. Neoconservative foreign policy— support for right-wing coups abroad, stealth wars and the consolidation of power in the U.S. presidency, are matched through neoliberal support for Wall Street and austerity programs. The ideology of state capitalism provides the unified view that exists prior to electoral choice.

The best that can be said about American elections is that no matter who is elected, neither the process by which they were chosen nor the form of political economy over which they will govern will have been democratically chosen. Additionally, the principles for which they claim to stand— particularly in the case of Democrats, are beliefs that are mostly, if not totally, unrelated to how they govern. Again, this isn’t a matter of hypocrisy. It is a matter of parsing political beliefs from politics as practiced.

The permanent story of well-meaning but hapless Democrats up against a baseline right-wing agenda places Republicans as the source of this baseline. The logic of how Republicans control both the Democrats’ and their own political program is never explained. In fact, there are fewer Republicans than there are Democrats by the numbers. So in terms of electoral politics, how does this work, precisely? The answer is that it doesn’t. Republicans are openly on the side of economic power, while Democrats serve the same masters while putting themselves forward as being driven by principles.

Lest this be unclear, having two superficially differentiated political parties serving the same interests (capital) is the analog of corporations controlling all sides of a transaction. Voters are given a choice after all of the politically relevant decisions have already been made. Actual democracy requires ending duopoly party control over the electoral process. And ending duopoly party control requires ending the state capitalism whose interests they exist to sustain.

The real world experiment of using the Democratic Party as a platform to launch an alternative political program just ended in failure. Pundits can blame the particulars— wrong candidate and / or wrong strategy. However, the duopoly parties will either support state capitalism and the oligarchs or have their control over the electoral process taken from them ($$$). That the Democrats feign having principles makes them valuable for maintaining the illusion of political difference. But to confuse feigning with having principles is detrimental to democracy.

The alleged competition between Joe Biden and Donald Trump pits a right-wing corporatist Democrat against a right-wing corporatist Republican. Sure, Joe Biden opposed busing to integrate public schools, supported summarily imprisoning undocumented immigrants, wrote material portions of both the 1994 Crime Bill and the Patriot Act, actively supported the U.S. war against Iraq and opposes single-payer health care, but he ‘believes’ that racism and xenophobia are wrong.

Here’s the rub— as long as the oligopoly parties control access to the ballot and state capitalism remains uncontested political economy, the choice will always be between Joe Biden and Donald Trump. The few times in my lifetime when it looked like there might be a choice— Bill Clinton versus George H.W. Bush and Barack Obama versus John McCain, reality set in within minutes of their assuming office. The political problems are systemic. Changing the players won’t change the nature of the game.

The press these days is full of earnest pleas that Donald Trump is uniquely dangerous and must be defeated. My recollection is that this was the pitch in 2016 as well— just after the Clinton campaign elevated Mr. Trump under the theory that he would be easy to beat and before it inflicted three plus years of the Russiagate fraud on us. Assurances that Biden-adjacent technocrats are waiting in the wings to see us through coming crises ignore that these same people designed Obamacare and gave Mr. Obama legal cover to murder American citizens without due process.

If Donald Trump is re-elected, it will be wholly the fault of those who vote for him and the establishment Democrats who chose Joe Biden because he was electable. Should Mr. Biden win, congratulations, you elected Joe Biden to the Presidency. God help us. Assertions that anyone owes Mr. Biden a vote that aren’t attached to a detailed and plausible plan for ending duopoly party control over the electoral system and the political power of state capitalism aren’t worth the warm gas that compels them forth.


Rob Urie is an artist and political economist. His book Zen Economics is published by CounterPunch Books.