The Center for Global Awareness is releasing our 6th book this summer: Connecting the Roots of a Holistic System: The Global Economy, A Brief Edition. The book is for students in grades 9-12 and non-economic major undergraduate students. To celebrate this event we are publishing a series of blogs this summer that summarize the essence of one of the chapters in the book: The Impact of Neoliberalism in the United States: Ten Consequences. We hope you follow and enjoy the blog series! The following blog is the tenth and last in the series.
Impact #10: Ascension of Dollar Democracy
Neoliberal policies have influenced the U.S. political system and vice versa. In this section, impact #10, the ascension of dollar democracy, we will examine how the U.S. political process itself has changed because of neoliberal policies. Both the Republican and Democratic Parties support these policies, although it would be fair to say the Republicans have accepted them more enthusiastically. Neoliberals channel this influx of money into the political system to candidates who support those who give the money. This vicious cycle of influence and pay-offs has compromised our democracy, made our country more unequal, and threatened the long-term economic viability of a once very wealthy nation. This cannot go on indefinitely, since the interests of the wealthy elite are not necessarily in the best interest of the whole nation.
Two contending segments divide the political structure in the U.S. into what I call elite democracy and participatory democracy. Elite democracy is democracy in which elites manipulate the democratic process for their own self-interest and control. They exert their influence by channeling huge sums of campaign donations to buy the allegiance of supportive politicians. The way our election process in the U.S. has evolved is that politicians desperately need large sums of money to mount expensive campaigns for offices ranging from city council to president. Money pours into the advertising media where candidates portray their carefully honed message as benign and good for the public interest but in reality it serves the interest of the elites providing large campaign donations. The politicians then promote the elites’ particular self-serving agenda such as privatization of community–owned assets, economic growth without regard for the environment, and military power to exert dominance throughout the world. Virtually all members of Congress and executive-branch policymakers are members of the top 1 percent when they arrive, are kept in office by money from the top 1 percent, and know that if they serve the top 1 percent well they will be aptly rewarded when they leave office.
In contrast to elite democracy, participatory democracy attempts to check the abuses of elite democracy and corporate economic and political power with regulatory legislation and careful oversight of the whole process. Increasingly, participatory democracy takes the form of involvement by citizen groups who are playing a “watchdog” role over giant corporations in an effort to curb their financial excesses and detrimental corporate policies.
The citizens of the U.S. are proud of its democratic institutions and traditions, its open society, and its freedoms. We have the freedom to choose our elected representatives, participate in the political process, and voice our concerns in non-violent protests. Many of these freedoms are the envy of the world. Yet, our economic system – neoliberal capitalism – is not an open system. I once worked for Xerox as a temporary employee, but I was not able to vote for the CEO, nor could I partake in the organizational meetings to give my input. Although Xerox treated me well, it was still a closed system. Economist Peter Barnes explains: “The reason capitalism distorts democracy is simple. Democracy is an open system, and economic power can easily infect it. By contrast, capitalism is a gated system; the masses cannot easily access its bastions. Capital’s primacy thus isn’t an accident. It’s what happens when capitalism inhabits democracy.” For example, Congress and the executive branch have allowed the regulatory agencies to be co-opted by the industries they were intended to regulate.
Interestingly, capitalism has taken on the trimmings of democracy, at least superficially. What the founding fathers considered vital first amendment rights for individuals, corporations have now appropriated. As in the 1886 Supreme Court Case – Santa Clara County vs. Southern Pacific Railroad – the maneuvers of a clerk awarded corporations personhood status. A recent ruling in 2009 further extended the First Amendment rights of corporations. In Citizens United v. Federal Election Commission, No. 08-205 – a bitterly divided Supreme Court ruled in a 5-4 decision that the government may not ban political spending by corporations in elections. The Supreme Court’s majority said of the First Amendment: the government has no business regulating political speech. The dissenting justices argued that allowing corporate money to flood the political marketplace would corrupt democracy. The case has enshrined the right of corporations to buy government, by removing limitations on campaign spending. The ruling overturned several Congressional laws that sought to regulate corporate and union campaign contributions; this ruling represented a sharp doctrinal shift, and it has (and will have) major political and practical consequences in the way elections are conducted.
- In what ways do you see “dollar democracy” being played on the political stage?