Slender hopes for democracy in a “rigged” capitalism

Classical liberalism clings to the idea (in reality, an ideological bias) that competitive capitalism, closely associated with the liberal-democratic political system, is capable of self-correction. 

Will capitalism save the world from the effects of capitalism?
It's becoming increasingly popular the idea that the world is in danger due to both the violation of natural limits and the explosion of inequalities between humans. Furthermore, those who care about the future of liberal democracy fear the risk that it may be damaged by the kind of "rigged capitalism" that is taking over. But the paladins of this emerging “rigged” model of relationship between business and public interest are the same that strongly deny the urgent need to change our social model in order to avoid its collapse.

None of the "easy" solutions that are hypothesized is convincing, a clear awareness of such a dangerous combination is needed.

 “Will capitalism save the world from the effects of capitalism?”

This question is not as trendy as many others which are predominant in everyday political chronicles. However, this topic is being raised, in many places around the world, with increasing frequency, in a wide range of social environments, by political currents very distant from each other. This depends on the mounting diffusion of the idea that the world is in danger, in consequence of both the violation of natural limits and the explosion of inequalities among humans. An idea that is now imposing itself, with its objectivity, far beyond the boundaries of anti-capitalist critical thinking.

A clear example of how the liberal economic circles are now facing this subject is offered by the chief economic editor at the Financial Times, Martin Wolf. Declaring that he reached the profound convincement that we need to eliminate the use of energy from fossil sources within a short time, he wonders if we will succeed and concludes: "Ms Thunberg fears our inaction. Mr Trump is one of the reasons why she is right to do so"[1]

In other words, by this conception the denialists, whose undisputed leader is Donald Trump, are certainly a threat to the world economy as they endanger life on the planet. But the question which needs to be answered is whether the transition to the green economy based on renewable sources (incident sunlight instead of fossilized) is conceivable within the constraints posed by the functioning of market capitalism. And here, starting from this point, together with the political options, the socio-economic analyzes on which they rest diverge.

Classical liberalism clings to the idea (in reality, an ideological bias) that competitive capitalism, closely associated with the liberal-democratic political system, is capable of self-correction. The underlying conditions are that ideas can circulate freely and that interests are “fairly” compared. Starting from this belief, the denials of Mr. Trump, as well as of the whole nationalists' international, are supposed to be successfully tackled by resorting to massive public investments and powerful regulatory interventions as effective means of guiding the choices of economic operators towards the ecological transition. In other words, as to these conceptions we should reckon on the resources of democracy which, through the will of the majority placed in defense of the general interest (of mankind, in this case), oppose remedy to market's failures.

The unresolved relationship between state and market

Well yes, it happened at other times. Always too late, though. Only after the destruction had ended. Without being able to prevent it from happening again, to ever greater extent, getting closer and closer to the limit represented by the threat to the survival of the mankind. A threat with which humanity has been living since 1945, from the explosion of the first nuclear bomb for war purposes.

Furthermore, we must remember that the new era which started from that turning point – when political power succeeded in the hard task of imposing strict limits on the market (primarily that of capitals) and on private wealth (not without aid, not calculated, of the spectrum of the “Red Army”) – lasted about a quarter of a century, but was then swept away during the period between Bretton Woods and the Fall of the Wall.

The question to be asked must therefore be reformulated: if the transition is conceivable within the constraints of the market now that capitalism has magnified its potency by submitting state power to its will as never before. I go back to referring to the writings of a liberal like M. Wolf: a "rigged capitalism is damaging liberal democracy"[2]. Quoting twice the same person helps me formulate the following thesis: that at this moment liberal democrats are unable to answer this question in the affirmative without denying their own vision of the phase that capitalism is going through.

Because if liberal democracy is undergoing the destructive force of a rigged capitalism, we cannot reasonably assume that the dyke necessary against that worrisome flood can be erected by that side. This is the reason why its champions are unable to get out of the grip between the arrogance of a "sovereignist" capitalism, well consolidated on radical denialism, and the declaration of bankruptcy of capitalism as a sustainable social model.

Should we commit our hopes to the enlightened?

Two further hypotheses remain for those who persist in seeing capitalism if not as the best of all possible worlds, as the only one available. If not for providing an alternative solution to bankruptcy, at least to allow few residual hopes.

One is that the means for a self-correction are guarded in the bosom of capitalism, in the guise of the main enlightened capitalists. In other words, through the open handedness of the big bosses. The latest case, which would be an example for everyone, is that of Jeff Bezos, the owner of Amazon, who has allocated $ 10 billion for investments in the energy transition. After the avalanche of funds for charitable ends, to fight inequality, by Bill Gates and the financing of the champions of open society, to save democracy, by George Soros, the man who disturbs Salvini's sleep, now is the emergency climate changing and global warming that touch the feelings of the billionaires and open their safes. And something similar is supposed to happen to help overcome Covid19’s emergency. Will it be enough? Rather than talking about green-washing, or figuring the net balance between the emissions produced by Amazon compared to those saved by projects funded by its CEO, the quantities at stake, at global level, are enormous enough to make the answer unnecessary.

But going beyond the purely accounting dimension, it must be considered that the big powers in the financial field have carried out a wide-ranging operation so to succeed in rigging capitalism, without which they would not be dominant at present. On the one hand, they have taken over the reins of communication on a planetary scale. In addition, they have also adopted a democratic guise in the sense that they recruited their army of paladins both through the large "popular" financial funds (see pensions) and in the "world below" (that of gangs and mafias) by translating the ancient concept "money has no smell" in an indemnification for its origin to guarantee its non-traceability. By doing so, they now suffer the fate of the sorcerer's apprentice because the armies of those who participate in various ways in sharing the spoils have escaped all control and autonomously feed the

A second alternative hypothesis comes from the other world. Not from another planet but from the world that separated from the rest of the planet with a Great Wall. From a State that has taken up the challenge of financial power by erecting a large cage, supported by the state monopoly of force, to defend the people. That cage, however, has a price, a contraindication: it defends the people from financial power, but it also defends political power from the people themselves, in the event that the freedom they use of exceeds the limits established by law. Since it excludes a large part of them by the process by which this law is formed.

The way Covid19 emergency has been addressed recently in China might suggest reflections on the relationship between freedom and safety, and how the right balance between people’s power and well-being is established in democracy. It means that there might be a very wide field to explore in order to choose the paths we should follow in the future: but nobody can affirm with certainty that those paths will be based on the rules that distinguish a capitalist society.

The time is now

In conclusion, let us reformulate the question for the third time: is the transition conceivable, in a capitalism that has magnified its power, without having to rely, for the task of avoiding market constraints, on the goodwill of a billionaire like Jeff Bezos? Nor on the decisions of a party-leader like Xi Jinping, placed at the head of an apparatus that does not allow any free confrontation with different expressions of the popular will?

According to the reconstructions of the events that led to the extinction of humans on Easter Island, in that case the social structure was not such as to allow a turnaround. But we are forced to believe that humanity has the resources within it so that the response is positive. Moreover, that those resources must impose themselves and prevail on the obstacles that a part of it, although reduced numerically, is imposing. The limit has been reached, if not exceeded. The time is now.

What we are not allowed to do is to deceive ourselves that those resources will spring by themselves thanks to a sort of survival instinct of humanity, without conflict or contrary reactions. Or, let’s say, because it is established by the laws of evolution. It is not so. Indeed, it is precisely in the name of Darwinian theory that the forces that fuel denialism take into consideration the possibility of climate disaster. What they deny, because they want to hide it, is the connection with the work of man and the social model that has been adopted, on a global scale.

Some further reflections on this topic are imposed by the actual Covid19 case, once we realize that the same people who lead the denialist troop in the field of climate change (like Mr. Trump or Mr. Bolsonaro) are now downplaying, if not denying, the danger associated with this global pandemic. The show (i. e. the financial carousel) must go on, despite some losses of elderly and weakened people. Politics must support economic recovery: that doesn’t mean, according to these positions, to help people who have lost their jobs, their wages, their savings, their wealth, their health, to recover their well-being but that business people have to pay less taxes and obtain generous incentives through the state coffers.

Making confusion between these two aspects, denying the phenomenon or its causes, is dangerous because it leads to an underestimation of the threat. The hypothesis cultivated by those political circles is that the human consortium would be profoundly modified, instead of being destroyed in consequence of a climate (or sanitary) crisis such as that which would occur if current trends continued. The part that has the resources necessary to survive is "their" part. The other part, destined to succumb, is not their part.

No kind of Malthusianism is underlying these ideas, nor any belief that there is a physical excess of inhabitants on Earth. Nowadays, even in these currents of thought, the conviction that there is an excess of consumption of resources beyond the physical limit of their reproducibility has prevailed. But if the cause is to be attributed to a social system based on the claim to ignore and violate this limit, this does not imply for them that this system is not able to restore the right balance by selecting among the humans who will adapt best.

Of course, what derives from this perspective for the future of humanity is a dystopian image, much worse than that of an incoming Middle Ages. An unprecedented barbarism is depicted. If we think about the idea that humans now have of ​​themselves, in such an image people of today could not even recognize themselves. And the surrounding natural landscape would be seen by today's eyes as inhospitable, hostile. Although, despite this, it could be an imaginable image, a thinkable future.

We must therefore not surrender or resign ourselves. But we must not rely on a fate of spontaneous accommodation either. Especially because not all natural processes are reversible: it can be said that mostly they are not. There is an absolute need for this awareness.

[2] This is the title of one of his most quoted articles from last September

The author was general manager of ISFOL (Institute of studies for the training and orientation of workers, dependent on the Ministry of Labor) and previously first researcher in ISAE (Institute of Economic Studies and Analysis dependent on the Ministry of Economy). For a period he collaborated with CGIL (Italian General Confederation of Labor), lately as coordinator of the National Employment Department.

Giovanni Principe
Insight - Free thinking for global social progress

Free thinking for global social progress