Thursday, April 30, 2015

The Evolution of Power and Society in Late Capitalism

Power is the ability to impose consequences, on the world, and on people. It is the ability to impose positive consequences, or negative consequences. Usually, these consist of rewards, for behavior pleasing to the powerful, or punishments, for behavior displeasing to the powerful. Of course, consequences may also be applied arbitrarily, but this wastes power. Power may also be applied inefficiently, which is also wasteful of power.  

In today’s world, the wealthy and many political leaders have the most power, and thus the ability to impose the most consequence.  The power of other institutions to influence the evolution of society and the economy has been significantly reduced.  While there are also other indicators of this, the reduced influence of these institutions can be seen in the combination of diminished material income, and increased dependency upon capital for such income as they retain. 

In a democracy, political leaders are expected to represent the will of people, and the interest of the people and the wealthy do not coincide. While both the wealthy and the people desire order and security, the wealthy and the people are always in competition for wealth and power. Since the people are dispersed, and the difference between what they have and what they need is less, unless they unite in will and action, they are at a decisive disadvantage to wealth.  The most important and unified instrument of the will and action of the people is their government.  Where the government is the strongest and most coherent agent of the wealth and power of the people, the wealthy will always seek to overcome, corrupt and capture it, that they may use it to help gather the wealth and power of the people to themselves.  On the other hand, seldom does an established government seek to take the wealth and power of the wealthy from them, since these tend to be regarded by the government and the people as legitimately acquired, and generally supposed to be applied to the benefit of the people.   

The wealthy are not monolithic.  However, they all share the same desire to enhance their own personal wealth.  While some are less principled in seeking and achieving this goal than others, none is so principled as to willingly give any substantial portion of his wealth and income to the people.  And so, few can afford to allow the unprincipled behavior of other wealthy to go without answer. Where some of wealthy still act as a check of the unprincipled behavior of other wealthy, the efforts of the wealthy to seize control of the government may be mitigated.  However, where the rewards for unprincipled behavior become substantially greater than the rewards for more responsible behavior, the ability and inclination of those wealthy who might be regarded as responsible, must be expected to decrease.   The pressure on the government to first pass laws and adopt policies allowing for its corruption, and then laws which further its corruption, thus increases, along with the degree of control of the government by the wealthy.  Efforts to oppose this process by interest groups from among the people are also increasingly repressed.     It should be noted that the effective transfer of control of government is an enormous transfer of wealth and power from the people to the wealthy, a transfer which usually goes unremarked. 

 As wealth becomes concentrated, and its influence on politics increases, the political leaders lose effective power, however, and become mere agents of the wealthy in the application of their power.  As this happens, political leaders, through the government, increasingly impose the will of the wealthy upon the people, whose interests they, and the government no longer represent.  Interestingly, even those interests the people once had in common with the wealthy, order and security, no longer completely serve the people, since they now also serve to enable the oppression of the people by the wealthy.  Once their government is captive of the wealthy, so long as the people are orderly and seek security, the wealthy and their captive government, through commerce and law, will strip the people of their property and rights. In this respect, an important instrument of positive power becomes degraded, as the people increasingly perceive their desires for order and security to be in, the net, harmful to themselves. 

In theory, of course, in a democracy, political leaders never ‘had power,’ as they were expected to be agents of the people, in transmitting and executing their will. However, the ability of the people to control these agents, that is the power of the people over them, was always limited.  The people were always limited in how and how much they could reward their representatives.  While they could offer rewards besides the material, those material rewards they could offer were in principle limited. Further, the perceived value of these non-material rewards were always under attack by the wealthy. And in general the people could only punish their representatives by not re-electing them to their office. The people were also limited in their ability to acquire information about many of the actions of their representatives.   For these reasons, and also because there were often a variety of ways to accomplish goals, political leaders always possessed a certain amount of discretion.  That is, a certain amount of their power actually originated from their own office.  Where, however, they are ‘elected’ by the wealthy, the wealthy have much more control over them, being able to both reward and punish them more, and also being more informed as to their actions, so most of this discretion is absent. (Because the wealthy are able supply greater reward, the expectation of that reward is higher.  Thus the punishment associated with the withdrawal of that reward would be greater.) Because of this, an ‘elected’ government can be expected to become a more effective agent of the wealthy than it ever was of the people.  Since the rewards to politicians change, we would expect the people who choose to become politicians to change, also.  We would expect them to become more self interested, and less public spirited.  We would also expect them to become more authoritarian and dogmatic, and less authoritative and pragmatic.  We would also expect them to be more sectarian and divisive, and less inclusive and unifying. 

We would expect them to identify with and seek to emulate their wealthy patrons, and devalue the rest of the population, especially the poor and other groups whose interests diverge from those of their patrons. Indeed, we would expect many to become wealthy themselves. However, so far as they must maintain the appearance of serving the interests of the people, they may be expected to engage in tactics which enable this.  Since their actions no longer serve the people, but favor the wealthy, those actions must be hidden from the people and obscured.  The people must be misled, and distracted by other activities which are irrelevant to the projects of the wealthy.  In particular the wealthy are indifferent to the divisions of the people, Yet, because these divisions are a powerful distraction to the people, the wealthy are prepared to exploit and aggravate them.

In this they are aided so far as the wealthy control the media. The media serves its owners. As society is segmented, so too is the media. Through the media the attention of the people is channeled, directed, and to a large extent, molded. The real actions of the wealthy and their servants in government, and the consequences of those actions, are downplayed or even ignored.  The importance of events which distract the people is exaggerated and those events dwelt upon. The information provided by the media increasingly diverges from reality, and action based on that divergence becomes counterproductive.  However, the information provided by the media is also what the wealthy wants the people to hear.   The wealthy are aware of this process.  It is circular,  and insofar as it progresses, it is perceived by the wealthy, and at some level at to some extent perceived by the people themselves, to render the people unfit for self-government, and requiring outside control of their activities.  It is this self-perception which renders the police state increasingly palatable to the people.  It is, however, not because they see themselves as requiring greater external restraint, but because they see their neighbors as requiring greater external restraint.  This heightened level of fear also increases the motivation in the individual to arm himself.      

Different segments of society become aware of the unresponsiveness and even the oppressive nature of their government at different times. Those people long at the bottom of the economic ladder do not notice, since they are most disadvantaged in any society. However, as society is plundered, each level of society plunders the levels below it.  Awareness thus tends to progress up the economic scale, but may be uneven, depending on the institutional  and economic relationships between the levels.  This awareness erodes the belief in the legitimacy of the government by the people.

So wealth, or capital, has power so far as it is able to impose both positive and negative consequences on labor and consumers. It gives rewards to labor through increases in wages and grants of authority, and punishes labor by discharging it, or laying it off.  (Of course, capital does not always interpret its own actions this way.)     However, as society becomes increasingly unequal, the ability of the wealthy to impose positive consequences decreases,  This because the rewards to labor that the wealthy bestow come from the income consumers spend on goods and services, and this income is decreasing as the wealthy increase their share of both that income and the wealth that comes from accumulating it. Indeed, this quantity can only decrease, unless compensated for by a greater rate of growth, or transfer of income from the wealthy to the worker.  This transfer, however, is contrary to the goal of the wealthy, which is an ever increasing stream of income to themselves. 

The reward the wealthy offer to labor of accumulated wealth is decreasing, and the income from that wealth also.  And, in its reduction of everything to material worth, the intrinsic value of labor, of work for works sake, is also devalued.  The wealthy see actual work as degrading, and this is eventually understood by labor; that laborers are regarded as fools, a vision that is reinforced by the abstract forms that work takes among the wealthy, and the disproportionate rewards the give to themselves and each other for such work as they do perform.

This means the wealthy must increasingly rely on negative consequences to exert their power. In particular, they must increasingly use force to contain and restrain the activities of labor.  Further, these negative consequences must continually escalate, to compensate for the negative consequences of the diminishing reward schedule given labor. 

It is intrinsic to capital and the wealthy that they devalue the other rewards that a society has to offer its members, since this relatively enhances the value of the rewards they offer society, and so enhances their power. They do this through their control of the media, through their control of government, and directly by how they invest their capital. (And of course, they also spend resources exaggerating the value of the rewards, and diminishing the apparent costs of those rewards, that they offer.)  It is necessarily part of their strategy to corrupt and co-opt the social, intellectual, and spiritual institutions that otherwise would provide these rewards, and which otherwise might provide a countervailing authority to their exercise of power.  Doing so, they necessarily corrupt and devalue the rewards that these institutions themselves provide.  But this process is part and parcel of capital’s decapitalization and plundering of society.  All institutions require both wealth and income to sustain themselves.  Where the wealth and income of these institutions can remain independent of capital, they can remain an independent and countervailing force.  Therefore, capital seeks to both erode and co-opt the sources of wealth and income that support these institutions.  Once the sources of wealth and income of these opposing institutions are co-opted, they may be withdrawn, and the institutions destroyed. Institutions that are dependent on income from the government, thus become vulnerable when the wealthy gain effective control of that government.  Indeed, it is evidence of capital’s control of government that they are able to do this.  And even where these institutions are not destroyed, they will be rendered compliant to the interests of capital, since the only other source of income is increasingly capital itself. 

 Further evidence of the control of the government by capital is that the government is set to tasks which, while beneficial to the wealthy, are either of no benefit to the people, or damaging to the wealth and income of the people.  Further, tasks which might be beneficial to the people are attacked and diminished, especially if they cost the wealthy income.    Most importantly, while war may be beneficial to the people, despite its costs to the people, and on occasion also be necessary, war need not be either of these.  However, whether or not war is either beneficial to the people or necessary, it is always a great source of profit to the wealthy.  When war is fought for profit, however, its goal is not victory, but perpetuation, and the maximization of that profit.  Since without victory, there can be no profit from the capture of foreign resources, all profit must be taken from the people.  What also must be taken from the people is the stream of resources from which that profit is derived.  These resources could otherwise be spent to the benefit of the people, and instead are effectively destroyed.  

So, the question arises, why hasn’t capital captured the government before now?
The first reason is the fact that the activities of government are, of themselves, not particularly profitable.  This is because, ordinarily, the discount rate for government investment is much lower than that of private capital.  One could say that, ideally, and in the limit, government is in the business of the preservation of resources, and the discount rate goes to zero.  Thus, a government responsive to the needs of its society will maintain its infrastructure.  When government is captured by capital, however, the discount rate goes up, public assets are sold at a discount, and infrastructure is allowed to decay. (The discount rate goes up because capital is effectively taking its profits from government in reduced taxation.) The second reason is that it is often much more difficult for a private entity to capture the return on these kinds of investments, than it is for the larger society.  (For these reasons together, education tends to be relegated to the public sphere.)

So taken together, these reasons imply that ordinarily capital will seek greater profits elsewhere.  And as long as it can do so, that is where its efforts will lie.  And as long as it has access to an expanding base of resources, capital will remain dispersed. That is, as long as access to resources expanded faster than the profit rate, capital would remain dispersed. But in recent times, this has ceased to happen, and return to real capital has declined.

However, the acquisition of resources and their modification and distribution throughout society, the provisioning of society, is merely an instrument to capital’s actual goal of acquiring a society’s wealth through ever greater monetary profits. Where greater profit can be obtained through manipulation of an economy, rather than providing for it, this is where capital will next turn.  Since this is process is essentially the wealthy transferring assets from the people to themselves without any substantial compensation, it can be expected to be resisted by the government. Thus, the government must be captured by the wealthy before it can be done efficiently.

  And the final reason that we haven't previously observed capital to capture the government is that one of the most important activities of government is to counterbalance the accumulation and concentration of profit in society. The government must distribute final demand throughout the economy, in order to sustain the people and their institutions.  When government ceases to do this, the ability of the people and their institutions to sustain themselves collapses. So the final reason is that no society long survives the capture of its government by the wealthy.