Are We An Oligarchy Yet?

By Joe Firestone

Matt Stoller believes that the recent pre-publication release of a study by Martin Gilens and Benjamin I. Page doesn’t support the idea that the United States is an oligarchy yet. He says:

A lot of people are misreading this Princeton study on the political influence of the wealthy and business groups versus ordinary citizens. The study does not say that the US is an oligarchy, wherein the wealthy control politics with an iron fist. If it were, then things like Social Security, Medicare, food stamps, veterans programs, housing finance programs, etc wouldn’t exist.

What the study actually says is that American voters are disorganized and their individualized preferences don’t matter unless voters group themselves into mass membership organizations. Then, if people belong to mass membership organizations, their preferences do matter, but less so than business groups and the wealthy.

Well, it’s true that Gilens and Page never say that United States is an oligarchy, and perhaps it’s also true that they don’t believe it. But they do say this:

”What do our findings say about democracy in America? They certainly constitute troubling news for advocates of “populistic” democracy, who want governments to respond primarily or exclusively to the policy preferences of their citizens. In the United States, our findings indicate, the majority does not rule — at least not in the causal sense of actually determining policy outcomes. When a majority of citizens disagrees with economic elites and/or with organized interests, they generally lose. Moreover, because of the strong status quo bias built into the U.S. political system, even when fairly large majorities of Americans favor policy change, they generally do not get it.”

And they’re right. Their data refute the idea that the preferences of the majority are, by-and-large, or even frequently, enacted into law in today’s United States. Insofar, as that’s a necessary condition for having a constitutional democracy, it’s hard to avoid the conclusion that right now the United States doesn’t have one. That finding has further implications.

First, the US doesn’t have either mob rule or constitutional democracy. Nor does the study show that the political system is paralyzed, in spite of all the complaints about excessive partisanship and stalemate in Washington. So someone is ruling. Who is it?

Second, it shows that, mostly, economic elites and interest groups representing them, many of them virtual puppets of the economic elite and corporations, are getting their way. Also, it doesn’t show that one individual is getting his/her way. That means there’s no King or Queen ruling, and also that there isn’t a single tyrant ruling. So, we can conclude that, mostly, the economic elites and their interest groups are ruling. How are they ruling?

Well, third, even though there are legislative and judicial forms specified in the Constitution being followed; there are many elements of current elite rule that are neither constitutional nor legal. For example, is it legal and/or constitutional for the Executive Branch to use prosecutorial discretion as a tool to refuse to go after the big banks for their blatantly illegal behavior leading to the mortgage crisis, the failure of major financial institutions, and the world economy? Is it constitutional and legal for the President of the United States to use drones to kill US citizens without legal or constitutional due process? Is it legal or constitutional for the President to use drones to violate the sovereign territory of other nations through drone strikes without the consent of the authorities of those nations?

Is it legal or constitutional for the big banks to use fraudulent documents to implement foreclosures? Is it legal or constitutional for the Administration to refuse to prosecute officers and employees of the big banks for committing these frauds? Is it legal or constitutional for local governments and the DHS to violate the rights of free speech and free assembly of Occupy protestors across the country in order to protect elite financial interests? Is it legal or constitutional for Justices of the Supreme Court to interpret the 14th amendment as conferring the liberties of biological individuals on organizations whose legal existence is an artificial legal construct? Are the Justices who are doing this not the products of influence previously exercised by the economic elite?

Is it legal or constitutional for State legislatures to enact and attempt to enforce laws to suppress voting rights of minorities and other groups across the country; as well as laws effectively removing the right to choose to end their pregnanicies of women with limited financial resources to exercise that right? Is it legal or constitutional to apply the law harshly to racial and ethnic minorities, and the poor, while refusing to apply it at all to members of the economic elite and their companies?

The answers to all these questions suggest that the non-democratic, non-monarchical rule validated by the Princeton Study is also rule by the economic elite that is a good deal less than constitutional or just. In my book, that makes it rule by the relatively few that is unjust, and isn’t that the definition of oligarchy, whether Gilens and Page say so explicitly or not?

Yes, it’s true that the wealthy and the very largest corporations do not yet control politics with an iron fist. But I think the criterion of controlling politics by using an iron fist, isn’t a necessary criterion for applying the term oligarchy. One reason is that “control” is a word implying mechanical cause and effect. The image is that the economic elite does something which necessarily “causes” its intent to be realized. But that’s an image inappropriate for human affairs.

Segments of the economic elite are able to bring much power and influence to bear aimed at getting a particular result from the political system in areas that concern them. But there is always the problem of unintended consequences in human affairs, and occasional failures to even pass legislation the elites favor. Control in a mechanical sense doesn’t exist.

At best the elites can create a strong propensity for the political system to follow one path rather than another. But elites cannot determine the path they want. If they could, then oligarchies would never fail or fall, and there would be no other forms of politics. So,”control” doesn’t work as an element in defining oligarchy.

A second reason why the definition doesn’t work is the falsity of the idea that an “iron fist” is necessary to have an oligarchy. Oligarchies may resort to brutal force as a favored method of rule sooner or later. But, the defining characteristic of oligarchy is unjust or illegitimate rule of the few, based on various instruments of power and influence, not necessarily the use of the “iron fist” as its primary method of choice.

In the US, the economic elite dominates policy across a wide spectrum of issues through legal and sometimes not so legal bribery, ownership of the main mass communication outlets, and using political and economic influence to avoid prosecution and pay minimal fines for illegal behavior. They limit the choices of the major parties for local, state, and national offices to individuals they believe are either friendly or at least not overly hostile to them, and to issues that distract attention from issues of growing inequality and their own domination of poliics. They manipulate communications and opinion in such a way that the economic world view of the public views the main principles of neoliberal ideology as “common sense.”

The ability for voters to see the truth about the behavior of elites and oligarchy is severely compromised by the influence over messaging and communications of the financial oligarchy; more and more, elite-dominated communications creates ‘reality’ for Americans. The actual reality of elite performance and the causes and cures of poor outcomes are viewed through a glass darkly, only.

For democracy to function well, the truth about the reality of elite performance must be much more available and accessible to the efforts of citizens to arrive at it, than it is now. But, increasingly, it is not. So, the two most important underlying conditions of democracy, the ability for people to arrive at the truth (their cognitive function), and their ability to act on the truth to change elites (their participative function) are both undermined increasingly over time.

As Soros rightly asks in The Age of Fallibility (p.110), “Who will enlighten the public” when these functions are compromised? And if the public cannot become enlightened, how can it keep the politicians and political operatives honest and focused on protecting the common good and the public trust? How can it prevent officeholders from orienting themselves primarily toward pleasing the economic elite?

As for “. . . things like Social Security, Medicare, food stamps, veterans programs, housing finance programs, etc . . . “ not existing if the US were not an oligarchy, that may be true in the long run, but give it time. All of these programs have come under attack by those who represent one or another segment of the economic elite, and all of them have either been frozen in place or lost ground. Their continued existence may mean that the oligarchy is only emergent at this point and not quite there yet. Or it may mean that in spite of its existence, enough nay-saying power still exists among the recipients of these programs that it would be risky to maintaining the oligarchy to push too hard for cutbacks or for eliminating them entirely.

The more one thinks about American oligarchy, the more it seems that the difference between statements like “America is not an oligarchy. But is becoming one as unions die,” and statements like “America is now an oligarchy and the oligarchy is getting more deeply entrenched as unions die,” are mere semantics, a matter of how one chooses to define oligarchy. The fact is that the US isn’t a democratic system, if it ever was one. And that economic elites now dominate politics and get their way far more often than the overwhelming majority of people get their preferences legislated. The fact is also that rule of these elites occurs through the use of illegitimate influence in the political system. So we have rule by the relatively few which is often unjust: i.e. oligarchy

If one wants to say that we now have an oligarchy, and someone else wants to say, we’re not quite there yet, but will be when a few more changes occur, that difference, alone, has little or no effect on practical action, unless one makes the further inference that if the US indeed has an oligarchy, then there’s no use resisting what the oligarchs want and attempting to transition to a democracy, where the majority can have the necessary influence to see that its interests are represented. But I don’t see people writing about oligarchy claiming anything like that. Instead, I see people who talk about oligarchy, plutocracy, and kleptocracy, supporting activism and doing whatever they can to turn the oligarchy into something else.

So, I think the fear that if one acknowledges that oligarchy exists, then one is either supporting or giving comfort to defeatism is unwarranted. That position doesn’t follow; precisely because there are many ways in which oligarchy can be undermined and overthrown, and that its existence at any time, doesn’t guarantee its continuance, any more than the existence of tyranny, or aristocracy guarantees their future viability.

When opposing either oligarchy or emergent oligarchy, however, I think there is one very important thing to keep in mind and that is Robert Michels’s (p. 400) “Iron Law of Oligarchy” and what it implies. Michels asserted that political parties and human organizations generally were characterized by strong continuous tendencies toward oligarchy and that these made the maintenance of democracy an unapproachable ideal.

Modern democracies have never found an answer to his argument that works. But it’s clear that if there is one it lies in countering continuous tendencies toward oligarchy with continuous tendencies toward democracy in our politics and in our various institutions, organizations, and Governments.

We need a new social invention; an institution that will enable us to restore bottom-up self-organization, distributed problem solving, and critical knowledge processing to their proper place in reinforcing open society, populist democracy, and adaptiveness to environmental and societal change. And once that is done to also enable continuously re-creating those outcomes in permanent opposition to the tendencies identified by the Iron Law of Oligarchy, and the new elite “establishments” those tendencies will always create.

In short, we need continuous democracy opposing and always checking continuous oligarchy by imposing continuous constraints on its consolidation. How do we institutionalize that? That is the problem we must solve if Democracy is to survive.

31 Responses to Are We An Oligarchy Yet?

  1. Jerry Hamrick

    “We need a new social invention; an institution that will enable us to restore bottom-up self-organization, distributed problem solving, and critical knowledge processing to their proper place in reinforcing open society, populist democracy, and adaptiveness to environmental and societal change.”

    I agree wholeheartedly. In fact there is a model for just that form of government: it is Athenian democracy. Modern technologies can adapt the best ideas of the ancient Athenians and build the system you are wishing for. In addition modern technologies can take the ideas of MMT and turn them into a functioning economy.

    • Joe Firestone

      Jerry, why do you think Athenian Democracy is a good model for this? What characteristics did it have that would lead you to that conclusion?

      • Jerry Hamrick

        The Athenians built their democracy on many ideas that would enable us to convert our republic to a democracy. Here are ten of them.

        Evolution by Cogitation—this is a process that depends on the sustained and cooperative intellectual acts of the citizenry. The Athenians’ specific approach can be adapted to fit our much larger population. The process depends on facts and therefore includes a mechanism to determine what the facts are, if there are any. The process sets goals and works to achieve them. It purposely works for the common good.

        Two Kinds of Power—the Athenians recognized that there are two kinds of power: transformative and administrative, and they understood that they should be kept separate. They understood that administrative power could be delegated, but transformative must be kept in the hands of the people. They limited the use of transformative power to extremely short periods, usually one day. Administrative power could be delegated for periods up to one year.

        Government of the People, by the People, and for the People—because Abraham Lincoln included this phrase in his Gettysburg Address, we Americans seem to think that we invented that form of government, but we didn’t—the Athenians did. If we take Lincoln’s phrase and apply it to many more recent governments we find: government of the German people, by Adolf Hitler, and for Adolf Hitler—government of the Russian people, by Josef Stalin, and for Josef Stalin—government of the English colonies, by George III, and for George III—government of southern whites and blacks, by the racist slavers and for the racist slavers—and government of the People of the United States, by the elites, and for the elites. This latter case is the Madisonian republic. The Athenians are the only ones who actually had government of the People, by the People, and for the People.

        Random Selection—the Athenians understood that elections were corrupt and would lead to oligarchy, so they did not use them. Instead they chose their representatives by random selection. The process was applied in several ways but at bottom it depended on random selection.

        Limited Terms, Limited Power—the Athenians had very short terms. In fact, the head of the government held office for twenty-four hours.

        Multi-Step Procedures—the Athenians again invented this process. In our nation our Congress decides which bills to enact, writes the bill, then writes the regulations. All of these steps are under the control of a small set of representatives. The Athenians divided the process and frequently changed the individuals involved.

        Liturgies and public works—the Athenians required their wealthiest citizens to finance projects that served the common good. Our wealthiest citizens, with some exceptions, make it their purpose in life to work against the common good.

        Transparency—when an administrator completed his term in office his accounts were checked in detail.

        The Oath of the Ephebes—upon reaching a certain age, males of a certain lineage began a program of military training. Part of the training included the use of adult mentors and the taking of an oath. This served to prepare the young man for public life and commit him to certain lifelong goals.

        The Silver Mines of Laurium—the Athenians used this mine to mint coins. They discovered an unusually large vein and met to discuss what to do about it. They decided to use this additional money to fund projects that would enhance the safety of all citizens. They decided to build a fleet of large ships, which ultimately enabled them to defeat an invading Persian force (at Salamis) and thereby extend the life of their democracy by decades.

        All of these ideas could easily be adapted to fit our republic and thereby convert it to a democracy.

        • Joe Firestone

          I don’t think they could easily be adapted. Also, only 10% of the Athenian population could vote; so how is that democracy? On “evolution by cogitation”, I’m certainly for that, but what was wrong with the athenian implementation of it, since Athenian Democracy turned out to be unsustainable, lasting for a briefer time even than the US has since the passage of the Constitution in 1789? Also, why do need the wealthy finance worthwhile projects? Is the Government short of money? Is it incapable of creating its own currency?

          I could make many other comments, but let’s start with these.

          • Jerry Hamrick

            I don’t think we will get very far, but I will give it a try.

            The objection to slavery in ancient Athens is always offered as an objection to this approach. I don’t know why one can say that when we had slavery that was much worse than that of ancient Athens. And I did not say that I wanted to adopt the Athenian system, I said I wanted to “adapt” it. For those who were in the lucky “10%” the democracy worked as a democracy should: it obeyed the will of the people. I don’t think our government does that with a couple of exceptions such as Pearl Harbor.

            The Athenian version of “evolution by cogitation” worked very well, and it is true that their democracy did not last as long as our system has, but there is a big difference that explains the disparity. We are now, and have long been, the dominant military power on the planet and we are protected by two oceans and two friendly neighbors. Athens was not very large and was constantly under threat by more powerful nations: Sparta, Persia, Macedon, and Rome. If Mexico and Canada had been relatively as strong militarily as thqse nations were in relation to Athens our history would have been much shorter and we would have died a violent death.

            I don’t think they needed the wealthy to finance projects as much as they needed to keep them under control and to keep oligarchy’s from forming. Furthermore they had no income tax so the people of Athens were in a different situation altogether.

            They did not produce their own currency, but they did use their coinage to do things for the people. Given the time who knows what they might have developed. They were not afraid to change things in order to build a better life. We Americans seem to respond to new ideas, especially ones we ourselves have not thought of, with curt dismissals.

            But you are right. If we don’t work together to build a better nation then we won’t have one. And that seems to be where we are today. There is a distinct lack of sustained, cooperative intellectual acts in our blogosphere.

            • Joe Firestone

              I’m not saying we shouldn’t consider using lesson learned from ancient Athens to inform changes we need. I’m just saying that a political system with a citizen population of only 10% isn’t a democracy.

              Second, I think the Government of the United States did attempt to realize the will of the people quite frequently from 1933 – roughly 1970, and that during that period it was a representative democracy that largely worked.

              Third, you say “The Athenian version of “evolution by cogitation” worked very well . . . ” By what measure did it work very well? The bottom line is that it failed to survive. I agree it existed in a tough environment; and it needed to adapt to that. Its version of “evolution by cogitation” wasn’t sufficient to solve its problems. Are you claiming, that this a TINA situation where Athens did the best it could? If so you have to argue that, at least by presenting various scenarios and showing us that they were unlikely to be successful.

              Unquestionably ancient Greece made great advances in our knowledge about how to create new knowledge, but it also developed different perspectives on how to do this. Athens treatment of Socrates doesn’t give me confidence that their way of going about thinking through problems and developing solutions was consistent with idea about how to advance knowledge advanced by Xenophanes, and I’m afraid I think that this was the only approach offered by the Greeks, or for that matter, the rest of the ancient world that is ultimately consistent with what democracy needs. So, I’m all about evolution by cogitation. But I don’t really think the Athenians were, and I suspect that was the main factor that did them in.

              Anyway, that brings us back to the main question, which is exactly what we should take from the Athenians in changing our own largely failed system? I don’t think you’ve really been clear about that except for random selection, where you’ve been incomplete.

    • Neither the U.S. constitution nor the Declaration of Independence conatin the word “democracy” or “democratic”. The U.S. was not conceived as a democracy. It is a republic. While it may incorporate some democratic features, it is not a democracy.

      • Joe Firestone

        So what? The US and many other modern nations have come to be called “representative democracies” or “liberal democracies” since the development of constitutional protections and universal suffrage. So, it is in that sense that modern political scientists use the term “democracy.”

  2. Joe, you raise what really is a (very important) political question – what will it take to halt and reverse the tendency toward oligarchy (I prefer the descriptor, plutocracy). In some sense you are thinking a few moves ahead as the very basic need is for the general population to grasp what’s really going on, and that will take some very simple “sound bites” that can rally voting blocks. WIthout this, key changes such as reforming corporate money in politics won’t change.

    We dialogued in an earlier post about the meme “it’s the people’s money” as one tool to get citizens to realize the monetary system is also “of” the people and “for” the people. I’ve started blogging to reach out to my network along these lines. I still ponder what the key messages will be that can sway a larger portion of the voting block. Ron Paul did remarkably well with his set of ideas. MMT needs such a champion and a simple set of principles sound bites.
    http://itsthepeoplesmoney.blogspot.com/

    • Joe Firestone

      Nice blog, Geoff. I hope you keep trying to spread the good news about MMT. On oligarchy, I think that IT can help us overcome that; but I also think there are two big threats to the promise of IT: government surveillance; and the removal of net neutrality. We need to stop those things and also the TPP which will negatively impact the internet as well.

  3. “In short, we need continuous democracy opposing and always checking continuous oligarchy by imposing continuous constraints on its consolidation.”

    Which takes people willing to work, then be disappointed, and then keep trying. How many people have given up, having worked for Obama, and gotten next to nothing for it.

    I think there are very few countries in the world that take citizens needs as first priority. Probably none in Africa, maybe a few in South America, Asia, none, and so on.

    And It’s remarkable how little people will settle for out of the wealth of a particular country. Look at the Congo for instance. or Zimbabwe.

    Thanks for this thoughtful essay.

  4. I would agree with some of the points that the above post makes, however, it’s reasons are perhaps incomplete, with some inaccurate conclusions or deliberate steerage and, in my own opinion, the article does not hit hard enough.

    Some examples and extended reasons:

    * From The US Constitution, Article 1, Section 10: “No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.”…The point I’m making here is that it is far easier to print and manipulate fiat money willy-nilly, say, when it is not backed by accountable tangible assets such as gold or silver. I also do not regard that the fiat dollar, when printed so freely in such a selfish, self-serving economic manner absent proper trade, is acceptable to either the citizens or to the world as the reserve currency, when it is solely backed by Treasury Bonds — another so-called intangible government asset that is constructed entirely at will out of thin air.

    * From the above post, the argument’s on the existence of a politically controlling oligarchy in politics might equally apply to Communism, Naziism, Democracy or to any form of national government as the norm. How is it, for instance, that a US Senator or a Congressman can enter US politics as a middle class citizen and leave politics after two terms as a millionaire? This outcome appears to be entirely acceptable in American politics and society, no questions asked. No checks,balances or transparency.

    * You will never ever get the truth from the US Media for the simple reason that this entity is owned lock stock and barrel by the oligarchy.

    * Disappointingly, the author of the above post also never once mentions greed or the love of money as the largest human driver for corruption and oligarchy control in US politics. How do you incorporate the greed variable, a wholly human trait, into your economic models, Mr Firestone?

  5. Joe Firestone

    Nice reply, I agree with most of it. On “greed,” I’m sure it’s a motivator, as is the desire for increasing power, and status. I think all of these are important in explaining the political activities of the .001% and their seemingly boundless desire to acquire more and more as they get older. But what does “greed” as a driver have to tell us that we don’t already know?

    • I guess greed tells us that we’re up against a huge and ambiguous enemy to honest government. Time enough we’ve heard the conservative point of view that the American Way is to climb up that ladder whilst achieving and striving to earn more and more money. How you earn that money at the highest level is another game entirey. I completely agree with what Bill Black so accurately describes and defines in his many writings on the corrupt megabanks.

      My own particular arguments and conclusions go thus: America has had seven years of financial distress and, so far, 4 trillion dollars (and probably much more QE that the Fed dares to admit) wasted on TARP, ZIRP, QE et al. With little tangible effect on US GDP or unemployment. And still no significant increase in demand or liquidity on the ground or Mainstreet for the common US citizen.

      The first stop for all this QE handout money was the megabanks, who initially used it to shore up their desperately insolvent positions. Then, from their vast government influence, these megabanks were made too big to fail and jail. Then they were allowed that special mark-to-market change or accounting fiddle to avoid insolvency. And since they were too big to fail — with no risk — these megabanks chucked all this QE money out onto the markets which is how we got that false recovery indicator from the rising Dow Index in 2009. These QE hot dollars found their way into the BRICs and many other developing economies only to reek havoc on their own currencies. Consequently, the hatred of the constant and unreasonable inflation on the trade dollar has lost America many of friends because the US Govt is so obviously using the reserve dollar for just America’s benefit(no thought for the global economy here).

      As pertinent evidence of this one sided dollar playfulness, it is not only China, India, Japan, Russia, Brazil, the ASEAN nations and the Middle East that are either abandoning the dollar or using swaps — but, more recently, both Europe and UK have also arranged direct swaps with China — thus totally avoiding the transaction dollar. This dirth on the dollar has all arisen because of the gross inflationary QE policies instituted by the American government.

      The last wrung in the dollar fall will be the eventual collapse of the petrodollar, which appears to be well under way. When that happens, all dollar influence will collapse.

      China is currently building the biggest oil refinery in Saudi Arabia as a favour to the Saud family. Simultaneously, the ruling Saud royal family have been greatly angered by Obama’s recently siding with the Syrian rebels — which was a huge geopolitical mistake. The deal with Saudi Arabia was that the Saud family would always trade oil for dollars provided that America gave the Saud family the military protection they required to stay in power. Obama appears to have defaulted on that promise to the ruling Saud family. In the future, therefore, I would not think it impossible that the Saud family allow purchase of her oil with the Chinese Yuan. Bye bye trade dollar.

      Just describing some of the global and national problems of the America government and the Fed so blatantly manipulating the US dollar for just America’s advantage. In no way could Obama’s economists realistically be thought of as thinking for global benefit.

      And yes, all this is driven by power, profit and especially by greed.

      Just imagine, if you will, a world where the trade dollar, supplanted by the Yuan or some other currency entity, is no longer the world reserve currency. How would America cope with all that debt?

      So I’ve tried to make several points here. First, QE will never work to mend unemployment and GDP until the money is funneled into the citizens hand, much as Steve Keen has promoted. And QE should never ever be given directly to the megabanks without a sufficient promisory mandate to lend and spend on Mainstreet — much as China achieved with her own nationilized banks in 2008 when she zoomed out of her own recession on turbo with a GDP rate of over 9%. Megabanks should have checks, balances and full transparency and this mandate should not be internally managed because of obvious bias, conflict of interest and, of course, the greed factor.

      Thus, these are the many reasons why QE, by itself, will never work to recover any economy in a month of Sundays if the QE is continually given to the corrupt and greedy megabanks.

      • Joe Firestone

        OK. First, greed as a motivator is nothing new. In fact, it is built into the very basic assumptions of neo-liberalism. MMT is primarily about the macroeconomy, so greed as a property of individuals isn’t prominent in MMT. But MMT does recognize the role of fraud in the macroeconomy. In fact, that’s BIll Black’s main focus.

        However, insofar as MMT writers focus on the individual level, I think our view of human nature is much more complex than one finds in neoliberalism. I think we find man multi-dimensional when it comes to motivation, and that we recognize many more driving forces in economics than simple self-interest.

        On QE, I think your view of it is based on assertions and misunderstandings and doesn’t recognize the realities of QE. The reserves produced by QE paid in return for assets, in large part Treasury securities, didn’t go anywhere because banking regulations required that they remain locked up at the Fed. And that’s where they remain until today. This has been documented widely by MMT writers. Just click on the MMT Primer tab above, and select the Randy Wray’s blogs on QE. They will fill you in on the reality of QE.

        Next, MMTers, including me, certainly agree with you that QE can’t produce full employment, and we doubt that QE has much impact on anything except some asset inflation. To get to full employment, we advocate things like SS payroll tax holidays, State Revenue Sharing, and especially the Federal Job Guarantee. All are fiscal policies.

        You’re right that bank bailouts will never help to create full employment, and also that the Federal Government bailed out the fraudster big banks. But that only reinforce my point that we are an oligarchy, in particular the kind of oligarchy we call a kleptocracy. It in no way contradicts what I wrote in this piece.

  6. I will take up Geoff’s reference to Athenian democracy and argue his case. First, when the modern political system of representative government was being established in Great Britain, France, and America, “democracy” was used almost exclusively as a term of reproach, to discredit an opponent. It was almost a synonym of anarchy. This carried on throughout much of the nineteenth century. Calling someone democratic in the latter eighteenth century was like saying “communist” during the Cold War. So, the article that you link on “if we ever were” democratic is very misleading. John Adams, Washington, Hamilton were not concerned with “protecting” and “safeguarding” the rights of the indebted patriots (the majority) who saw the revolution as a chance to free themselves from the oppressive rich both in England and the colonies. Instead, those founding fathers were both contemptuous and terrified of the poor. They very deliberately rejected democracy for a republic, which they defined as rule by what they called a “natural aristocracy.” In fact, their model for democracy was Athens and they rejected it. (Closer at hand for democratic governance were Amerindian nations, that also had to be vilified, just as women, slaves, and the poor had be disqualified for various invented reasons to keep the power in the hands of the wealthy patriots.) Athenian democracy (again – only one model in a grand spectre of self-governing societies, but the one that the political philosophers had discussed) was based on the capacity and responsibility of every citizen to contribute to governance. “Citizen” can be as as broad a category as you like. The principle is what is key here – the fact that Athenians limited the category to free males (no women, no slaves) was its self-imposed constraint. Think of our jury system. We all acknowledge that every citizen (with a few exceptions for felons and mentally-handicapped) can sit in judgement. So it was with democracy. So, why Athenian democracy now? Because it is the only way that we can move forward given the system that we have. The founding fathers (in the USA, France, England, and my Canada) all associated elections with oligarchy – that they called aristocracy. An electoral system was not chosen because it was democratic, but because it was a way to ensure that the country never become democratic. The very act of voting gets voters to choose their betters to govern them. And the framers of the constitution not only knew this, but counted on it. That is why the word “democracy” is never mentioned in the Declaration of Independence or the Constitution. The very last thing they wanted. So, Joe Firestone, I can tell by the people you’re citing that there is going to be a problem. George Soros, for instance. Once you think that democracy means voting, you are trapped. Of course it doesn’t matter how much people understand or what access they have to the truth. They have no access to power. And our system of governance, an electoral system mistakenly called “democracy” was designed to perpetuate that. The word “democracy” was only allowed into the public discourse over time, when the powerful stripped it of its actual meaning to trick people into thinking that elections meant democracy. The powerful have never let their hold on power slip and they are still frightened of the people. Back to Athens: Athenians were chosen to serve in the Assembly by lot. That’s the only way that I can see that we can move forward from where we are. (I won’t elaborate here, because the post is getting too long.) The problem is convincing people that they have the capacity to serve. People protest and rage and rant in utter powerlessness against the oligarchs. But the Athenian notion of democracy scares them. For the honest ones, it makes them see that they are comfortable in their impotence.

    • Joe Firestone

      Athenian Democracy existed in the context of a City State with about 300,000 people. You’re proposing we adopt it now for the US including selecting office holders by lot. Fine! How do you propose to work that in a State of 320,000,000 people, and what would be the terms of office? For that matter, what would the offices be? And how would the Government be structured? What would be the criteria for citizenship?

      • Not, not that we simply transpose Athenian democracy here carte blanche. Of course not. But adapt what is useful for these times. For some more detailed reflection on the transformative potential of direct democracy (with an appreciation for the Athenian experience) for our representative democracies, you could look up Etienne Chouard in France. His project is called Plan C. Very imaginative and bold. Any proposal that would change the system is bold. He has been thinking about this for several years. And one of his concerns is the monetary system. He is perfectly in line with MMT insights. Your response imagines mapping direct democracy on top of what we have. That’s an easy way to discount the possibility of change. In fact, what you are doing is just what the founding fathers did. They said that Athens could not be a model because direct democracy could only work in a small community. (James Madison) It was a way to keep from even allowing it on the table. Underneath that reflex is fear or distaste or contempt for the people. But Athens is not by any means the only example of direct democracy in history. We have already been trained to see the world only in terms of empires and rulers. But the mechanisms underlying Athenian democracy are still workable. You could consult Chouard if you’re interested. I also will be publishing on this soon – the book is still in peer-review.

        • Jerry Hamrick

          Paul, I agree with what you said about Athenian democracy, and I am publishing on this very soon myself.

        • Joe Firestone

          Thanks, Paul, and thanks also for the reference to Chouard and Plan C.

          • you’re welcome. thanks for opening this discussion.

          • Mr. Jackson, Mr. Hamrick, (and Mr. Firestone) this is one of the most thought-idea stimulating and informative conversations I’ve ever read here! I’m grateful for this instruction, and will do my best to make use of it. Thanks very much.

            • Joe Firestone

              Thanks, J. D. I know you’ll add some original thinking to this discussion.

  7. After all the discussion concerning the question of wether our governance is this or that (Oligarchies, Plutocracies, etc.), in the end, makes little difference on the ground, and muddies the objective process of changing it, call it what you will, it still stinks of oppression. The process of ridding ourselves of these Narsassists, being whatever they may be called, is nearly the same, and the discussion should be on the model needed to execute this transition. History can aid us if we ask the right questions. Ancient Rome was in very much the same predicament, i.e., a Senate not able to function, an Empire too large to afford, and finally a Dictator (Oligarchy equivalent) to take advantage of the whole mess. Revolution comes in all forms, and I hope that it does not come down in the form of violence, but that may not be avoidable if this economy crashes by intensional Oligarchs once again. One thing is for certain…one way or another, they have to be eliminated from the governing process.

  8. Justin Synnestvedt

    Joe Firestone

    Thanks for the nicely nuanced critique.

    I would add only that readers might appreciate Jeffrey Winters’ 2011 book, Oligarchy, which gives the history and changing character of oligarchy worldwide. It describes 4 kinds of oligarchy. America today has what Winters calls “civil oligarchy,” whose key characteristic is that the state passes laws that support the main oligarchic purpose – i.e. “wealth protection.” The state’s law-making decisions are hugely influenced (one could almost say ‘determined’) by a wide and changing variety of instruments familiar to your readers. These include campaign financing, lobbying, privately endowed institutions and university chairs, professional think tanks, law suits against the IRS, and a constant stream of publicity, ‘documentaries,’ disinformation and myth-making efforts. This is not to mention the myriad other ways of keeping the public distracted and ignorant about these matters, which the marketing industry would continue on its own, with or without the input of oligarchs.

    As has been commented here, sufficient critical education is the only (non-violent) way of controlling this abuse of democratic principles. But being a retired philosophy prof., I’m not hopeful that such critical education will occur for a long time, if ever.

    Yours, Justin Synnestvedt

    PS, My just-published book, Inequity, Iniquity and Debt speaks to the moral (and religious) principles of economics and wealth, and the MMT contribution to public purpose.

    • Joe Firestone

      Justin, Thanks for the reference to Winter’s book. I believe strongly in critical thinking too. See the various links including blog series links here: http://www.kmci.org/kmci_resources_and_links.html And also this: http://kmci.org/alllifeisproblemsolving/archives/hello-world/#more-1

      Thanks also for the reference to your book. I checked it and think you need reviews strongly endorsing it to get sales. The kindle sample isn’t enough. If you want the reviews, I think you need some promotional days where the book is free, otherwise you’ll be waiting a long time until enough people buy it to get you reviews.

      Finally, thanks for the reference to Winter’s book.

  9. It seems wholly inadequate to talk about the US system without mentioning the elephant in the room: global military empire. The US population is a beneficiary of increased wealth and resource extraction from around the world, our slave classes toiling away in the remote mines of Africa etc. Poor Americans would be rich in other regions.

    The empire relies on bread, circuses and propaganda to keep people distracted from its business. So it throws concessions such as Social Security and food stamps simply to maintain power and avoid challenges from within. When the domestic scene gets ugly it hinders the profit seeking around the world, and so it is more profitable to placate the masses, who are more than willing to remain pliant, ignorant and gullible, as long as they receive a minimum of benefit from the system.

    It’s all cold, calculated, immoral and pretty intractable at present. Personally, I will never vote for a Democrat or a Republican again. They are immoral organizations with long blood stained records where the leadership should probably be in prison. Vote third party. Only.

  10. Take the case of Canada which had a flourishing social democracy until just recently. When Stephen Harper got his majority in 2011, he began to treat his position as a license to do whatever he wants to do without consultation with the bureaucracy, with the experts, with scientists, without informing the press and, in fact, without input from anyone who could provide him with advice or information. For reasons I do not completely understand, our PM sees our society as being on the wrong course. He has attacked the public institutions that Canada has defined itself by: the public service, Stats Canada, Elections Canada, Nuclear Power, the scientists (especially environmental ones that could help him to inform policy); he has made arbitrary changes to the criminal code, to the way unemployment insurance works, to making pensions riskier; he has happily bailed out the banks in 2009 (and then lied about it), and has created the worst environmental disaster in Canada by expanding the tar sands and selling that resource to many foreign corporations.

    He is a supporter of private/public partnerships.

    For Canadians, the proof of how much we believe in our democratic ideals will be tested in the next election in October 2015 and I fear the worst. Harper has tried to appeal to his “base” and has tried to expand that base; for example, when the Ukraine was pressured by Russia to “vote” on whether they wanted to join Russia, Harper began to appeal to the Ukrainian vote in Canada (there are many families of Ukrainian descent) by sending fighter jets to Europe (mind you only 6 elderly ones!) and by verbally attacking Putin. He has done similar things to appeal to the Jewish vote and to other ethnic minorities. He has attacked charities he does not like and has created and office of religious freedom. He has tried to disenfranchise those who do not vote conservative through robo-calls and by repealing vouching. He maintains legitimacy by being on the edge of legality (he appoints Senators who misuse their positions in the Senate) and pressures others to do what he wants them to do (having Senators shill for him during campaigns) and drops those that become a nuisance (Nigel Wright). He refuses to consult with the provinces because they would outnumber him (no way to control that!) and only meets with the media when it serves his purpose.

    I do not know how well informed the average Canadian citizen is, but we have to depend mightily on our media that still tries to get at the truth of what our present government really stands for.