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How a Free Market Inevitably Produces Dictatorship

Eric Zuesse

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Who rules the land? A deeper and truer version of this question is: What rules the land? Is it the money (the aristocracy), or is it the people (the public, the residents on that land)? (For the interest of paleoconservatives, the issue of residents’ citizenship will come later here, as “immigrants” instead of as “citizenship”; but our basic focus is not ethnicity/nationality; it’s class: the money, versus the voters; not the natives, versus the foreigners.)

In a democracy, the public rule — the people do — and it’s on authentically a one-person-one-vote basis, and anyone who is a resident in that land can easily vote, just like anyone else who lives there, because only the residents there, during the specific time-period of the voting, are the ultimate decision-makers, over that land, and over its laws. This is what a democracy is: it’s one-person-one-vote, and, in the political sense, it’s total equality-of-rights and total equality-of-obligations — real and total equality-by-law: equal rights, and equal obligations, for all residents. A democracy applies the same requirements to everyone.

This does not mean that individuals are equal in their abilities and in their needs, and so it’s not a statement about the economy; it is purely a statement about the government — a political question. The economy is a separate matter, though it’s highly dependent upon the government — the laws that are in place and enforced. Many people confuse these two fields, and mistakenly think that the economy is basic to the government.

So: the economy is dependent upon the government; the government determines the economy, which, in any land, is highly dependent upon the laws that are in place and that are enforced — the government.

That’s only “natural persons” who control a democracy — no collectives of any type, corporate or otherwise, can vote, because, if it were otherwise, it would be an easy way to establish a dictatorship there: persons with the financial means could create any number of “artificial persons” who could vote, or could buy votes (such as by purchasing news-media to slant ‘reality’ selling politicians and political positions to the voters), and this money could produce a country controlled more by dollars, than by owners (i.e., than by actual persons, votersnot by artificial “persons” such as the wealth-collections that are known as corporations). If wealth-collections could vote, that would invite control over the land to be by wealth (the number of dollars) instead of by actual residents (the number of persons). It could even produce control by foreign wealth. Foreigners could end up controlling the country if the number of dollars is a bigger determinant of who rules than is the number of voters.

Obviously, no democracy will allow foreigners to control the land. Imperialism is inconsistent with democracy; any empire is dictatorial, by its very nature. It entails dictatorship over the residents in its colonies, even if not necessarily over the residents in the imperial land that had conquered the colonial area.

Empire is consistent with a free market, but it is inconsistent with democracy. No empire is democratic, because each colony is ruled by non-residents. (If the colony were ruled by its residents, it wouldn’t be a colony, and there wouldn’t be an empire.)

A federation is not an empire. The difference between them is that, whereas in a federation, the right of self-determination of peoples takes precedence over the federation’s interest in maintaining the status-quo; in an empire, there is no such right — an empire is a dictatorship. In political matters, no empire has a right to be an empire; just as, in economic matters, no person can actually own another (notwithstanding any ‘slave’-‘owner’ — or ‘seller’ — falsely believing to the contrary).

The propaganda for a free market is funded very heavily by billionaires such as the Koch brothers and George Soros, because control over countries naturally devolves into control by wealth, instead of into control by people (and certainly not by residents), if a free-market economy exists there. Billionaires do whatever increases their power; and, beyond around $100,000-per-year of income, any additional wealth buys no additional happiness or satisfaction, but only additional status, which, for individuals who are in such brackets, is derived from increases in their power, because, at that stage of wealth, money itself is no longer an object, only status is, and additional status can be derived only from additional power. All of the empirical findings in the social sciences are consistent with this; and, whereas the income-point in most of those studies, beyond which additional dollars produce no additional happiness for the owner, has been $75,000 per year, there has been inflation since those studies were performed, and one might more accurately say today that $100,000-per-year is the income-point beyond which only status is increased by additional income; happiness or satisfaction is not increased by income above that point. This is a statement about nature; it is the reality in which any market — free or otherwise — exists. It is “human nature,” and that’s basic to all of the social sciences which pertain to humans, including political science, and economics.

In economic theory, the phrase that has been traditionally used to refer to this reality, even before recent empirical studies showed the reality to be this way, was “the declining marginal utility of money.” Beyond around $100,000/year, additional “bucks” are for status, not for happiness. Anyone who has no addiction to status, doesn’t care about having more money coming in beyond that amount. Beyond that amount, the additional marginal utility of each dollar received is actually zero. The wealth-addict might crave more, but it won’t do him-or-her any actual good; it won’t make the person happier. That’s the reality, now proven in numerous empirical studies.

This reality has major political consequences. One is that a country with highly concentrated wealth (the bottom 50% own almost nothing) is serving the addictions of a few, not the needs of the many — and therefore concentrated wealth cannot be sustained in a democracy, but only in a dictatorship: a dictatorship of wealth, where what determines power isn’t the voters but the dollars.

An important philosophical champion of free markets is the libertarian philosopher Hans-Hermann Hoppe. In 2001, Hoppe published his DEMOCRACY: The God that Failed, which was considered a libertarian masterpiece. Hoppe unapologetically argued there that libertarianism and conservatism are one and the same — and that he wanted it, passionately: he hated democracy. Unlike many libertarians, who falsely allege that democracy is impossible without there first being libertarianism (a free market), Hoppe acknowledged and argued for the mutual inconsistency between libertarianism and democracy. Although I don’t share his preference for a rule by the wealth instead of a rule by the residents, and thus he is an ideological opponent — the opposite of a supporter of my own position, as it’s being set forth here (and far more briefly than his tome) — I consider him to be the fullest and most internally consistent libertarian philosopher, and perhaps the most significant libertarian political philosopher in this Century, thus far. Whereas lots of people call themselves “libertarian,” he actually is — fully — that. Of course, some libertarians don’t agree with Hoppe’s view; but, on 30 August 2011, Michael Lind at salon.com headlined “Why Libertarians Apologize for Autocracy: The experience of every democratic nation-state proves that libertarianism is incompatible with democracy,” and he empirically found that Hoppe was correct about this incompatibility.

Hoppe argues not only for an aristocracy, but for a hereditary one, and he even opposes immigration; so, if he were a democrat, at all, then he’d be excluding immigrants from voting. But he’s not even that much of a democrat. And he especially approves of hereditary monarchy. His reason for that preference is traditional libertarianism, which favors the private over the public: “Hereditary monarchies represent the historical example of privately owned governments, and democratic republics that of publicly owned governments.” Libertarianism opposes public ownership, favors private.

Like any philosopher, Hoppe has ignored crucial issues in order to sell his case (after all, it’s a philosophical, not a scientific, case; it is ideological propaganda alleging that libertarianism is good — instead of being anything scientific); and the most interesting thing that he has avoided discussing in it is anti-trust, anti-monopoly, anti-oligopoly — the issues about concentration of power. He ignores those issues. For example, whenever he uses the term “monopoly,” he is referring solely to “government,” never to the economy (he assumes that in a free market there can’t be any oligopolies or monopolies). He is, after all, a crank (a free-market political theorist and therefore someone who implicitly denies that government is basic to an economy, and who assumes the converse, that the government is instead built upon the economy), though he’s an erudite one and thus acceptable to his fellow-scholars. Erudition doesn’t mean, nor necessarily include, being scientific. And the (scientific) reality is that the political issue isn’t ‘the government’s monopoly on power’, but instead it’s simply any concentrations of power — both monopolies and oligopolies — which unequalize both rights and obligations in the society, such that whereas a few people (the aristocracy) have many rights and few (if any) obligations, most people (the public) have few rights and many obligations. The latter type of society is called a “dictatorship.” The more that it exists, the more that it comes to exist — and, consequently, the less that there can exist democracy.

The basic issue in political science is not “freedom” versus “slavery” (two concepts in economics); it is “democracy” versus “dictatorship” (two concepts in politics).

Power precedes the economy; it directs the economy, if and where an economy even exists.

Democracy is natural where wealth is nearly-evenly distributed. Dictatorship is natural where wealth is extremely-unevenly distributed. The latter is true because no nation can maintain a democracy if the wealth is highly unequal. If the wealth is highly equal, then the possibility for democracy to emerge is substantial. But if the wealth is highly unequal, then the possibility for democracy even to exist to any extent, is low. All of the extremely wealthy people would have to be honest in order for them to tolerate rule by the majority. Otherwise, they’d simply be using their news-media to deceive instead of to inform the public: that’s what the ‘news’-people would be paid to do, cover-up real problems, and manufacture ‘reality’ — manipulate the public, instead of inform the public. If the distribution of wealth is highly unequal, the ‘news’people will be paid to deceive the public, instead of to inform the public. This (and it includes the ‘charitable’ foundations) is why the majority of the public have come to believe the profoudly false assertion that “having a rich class is a benefit” to the public. They’ve been deceived.

Most of the world is dictatorial. That’s because, almost everywhere, wealth, and even income, is extremely unevenly distributed. The laws and their enforcement determine the distribution of wealth and of income. The natural tendency is toward dictatorship, because a free market produces increased economic concentration. Democracy is not natural. Dictatorship is natural. What’s natural for a body-politic is to fulfill addictions, not to fulfill needs.

As inequality of wealth increases, corruption also increases. Empirical studies find that successful people tend to be bad: it’s natural for the scum and not the cream to rise to the top in organizations. So, the wealthier a person is, the worse the person tends to be. And it’s not just that, but success itself tends to make a person worse than the person was before the success. So, it’s natural that at the very top, tend to be the very worst people. Good government is not natural; bad government is natural. Good government is unnatural.

Corruption is rule by deceit. An example of how that works at the federal-government level is here. An example of that in more detail is here. Another such detailed example, but at the state-or-local government level, is here. And an example of it within academia, and at the federal regulatory agencies, is here. So, in a country that has extreme wealth-inequality, the way in which the public’s ‘consent’, to the billionaires’ rule, is manufactured, is by means of deceit — a rot that’s throughout the entire body-politic and society. This is how an extreme inequality of wealth is produced. It cannot be done honestly. Transparency International has reported that corruption and “social exclusion” or bigotry tend to go together, but has ignored the possible relationship between corruption and the economic distribution of either wealth or income. Perhaps the billionaires who fund TI don’t want such correlations to be pointed out, if they exist; so TI doesn’t investigate this.

The reason why a free market inevitably increases dictatorship, is that dictatorship is natural, just as a free market itself is natural, and power pre-exists everywhere to upset and overturn any equality that might exist in either sphere. Power is natural. No economy exists but that power pre-exists. The political sphere pre-exists the economic sphere. The basic reality, in any society, is power.

Thus, the question has always been: What rules? Is it the wealth? Or is it the people? The natural condition is for wealth to rule, because money (especially all excess money, all income above $100,000 per year, and certainly all income above $1,000,000 per year — what can truthfully be called 100% political money, because it can be ‘given away’ with no real loss to the current owner) is power. Although wealth isn’t the only source of power, it is a major source of power. (It can even be the major source of power.) And power rules everywhere. By definition, power rules in politics; and, by nature, the wealthy tend to rule not only in the economy, but also in the government.

That’s what’s natural. Democracy isn’t natural, but a free market, and an aristocratic government, are both natural. And the political reality determines the economic reality.

PS: You have just read here an entire online book. This article, including all of its sources that are linked-to, and the sources that are linked-to in those sources, constitute more than an ordinary book. The complete case and its documentation are fully presented in it. Anyone who finds this book valuable, might also find valuable, as a follow-up to it, a book of the traditional sort: Marjorie Kelly’s The Divine Right of Capital. Her Introduction there says, “The problem is not the free market, but the design of the corporation.” The first clause is false, but the second clause is true, and her book focuses in on that and gets it right. Any solution to either problem would need to be based on an accurate understanding of both of them. The bigger of the two problem-areas is the one that has been addressed in the present book-article. The second area is maybe 10% as large, but it too is significant, and what she says about it is true.

PPS: If you like this article, please pass it along to your friends, if only to get their feedback on it. They’re not likely to have encountered elsewhere the information it contains.

Author’s note: first posted at strategic-culture.org

Investigative historian Eric Zuesse is the author, most recently, of They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010

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Americas

Trump’s New Wall? Mexico’s Southern Border

Lisdey Espinoza Pedraza

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For much of modern history, Mexico defined itself in opposition to the United States. In recent years, the two countries stepped up cooperation on almost all relevant issues, and the two nations are now deeply intertwined politically, economically and culturally. This is bound to change. After months of ignoring Donald Trump’s provocations, López Obrador reacted rapidly to Trump’s shakedown and agreed to a number of resolutions of extraordinary scope and urgency: the new Mexican administration agreed to deploy the country’s federal police to its southern border to crack down on immigration; and opened the door to the controversial “Remain in Mexico” policy that would turn Mexico into a Third Safe Country in less than a month from now.

As stated in the agreement, Mexico would take in all the refugees that the US decides to send back to Mexico to await resolution of their asylum process. This could take years, given the substantial immigration backlog in American courts. The agreement goes further: Mexico is responsible for the provision of education, health care and employment for such refugees. This could easily lead to a serious humanitarian crisis that Mexican institutions will be unable to deal with.

This approach contradicts previous Mexican presidential vows for regional development and humanitarian relief rather than confrontation and enforcement. Conditions on the ground in Mexico are far harsher than the Mexican Foreign Affairs Minister, Marcelo Ebrard and the President, Andrés Manuel López Obrador, would like to admit, and this is partly due to the current administration’s miscalculations: López Obrador has dramatically cut the budget for governmental agencies responsible for managing refugees and processing removals. Mexican border towns are also ill-equipped for handling transient migrant populations; and Mexico also faces other more systematic challenges, such as corruption and lack of rule of law enforcement. The new policy agreed with the American government is likely to result in a significant increase in claims filed for asylum in Mexico. Mexico’s immigration bureaucracies are utterly overwhelmed, and López Obrador’s misguided budget cuts have exacerbated their failings.

Mexico’s immigration policy is now bound by an immoral and unacceptable deal that will effectively turn Mexico into Trump’s border wall. The global system for the protection of refugees is based on the notion of shared responsibility among countries. It is very dangerous for the US to use Mexico as a pawn to set an example and ignore its international responsibility. This agreement also violates international law on refugees: Mexico is a life-threatening country for undocumented migrants. Human trafficking, recruitment for organised criminal organisations, abduction, extortion, sexual violence, and disappearances are some of the issues migrants face in Mexico. Finally, Mexico’s National Guard, the agency that will be in charge of monitoring the southern border, was created by López Obrador to tackle domestic crime. Its members have no training nor knowledge on immigration matters. It is an untested new military force that could end up creating more problems than the ones it is trying to solve.  Deploying agents to the border could also have a high political cost for the president.

The agreement with Trump gives López Obrador 45 days to show progress. If Mexico fails, Mexico will be forced to set in motion some version of Safe Third Country agreement, or face further tariff bullying from the US. This deal has been sold by the new Mexican administration as a victory over the US. More migrants, less money, extreme violence and a recalcitrant, unpredictable northern neighbour are the ingredients for a potential, impending refugee crisis, not a diplomatic victory.

Could Mexico have taken a different approach? Yes. Trump’s decision to impose tariffs would exacerbate the underlying causes of immigration in the region and do nothing to address it. His bullying to force Mexico to crack down on immigration was a cheap electoral ploy to mobilise its base with a view to winning the 2020 elections. This is nothing new. Trump is not seeking a solution; he is seeking a political gain. He built his first presidential campaign on an anti-Mexico and an anti-immigrant rhetoric. It worked in 2016, and he is planning to repeat the same formula.

The Mexican administration lack of knowledge on diplomatic matters, and their inability to play politics let a golden opportunity go. Using trade to bludgeon Mexico into compliance with an immigration crack down makes no sense: Mexico is not responsible for the increase in migratory flows. Central America’s poverty and violence trace back to American policies in the 1980s. Mexico is not responsible either for America’s famously dysfunctional immigration system. Trump’s economic threats against Mexico may not even have been legal: both the North American Free Trade Agreement (NAFTA), and the newly agreed US-Mexico-Canada Agreement (USMCA) require most trade between members to be tariff free.

Mexico could also have hit back with by levying tariffs that would have hurt swing-state voters, and in turn hurt Trump. This was the golden opportunity Mexico let slip from its hands. Mexico could have responded by hitting Trump where it hurts: Tariffs on American goods heading south. Mexico responded in a similar manner in June last year in response to the steel and aluminium tariffs. Mexico could have raised those tariffs each month in tandem with American levels.

This retaliation would have highlighted the gap between Trump’s anti-Mexican rhetoric and the underlying interdependence of the US and Mexico with stark consequences for the US presidential elections of 2020. Many of the biggest exporters to Mexico such as Arizona. Florida. California, Michigan and Illinois are swing states. New tariffs could have thrown Texas into recession and put its 38 electoral votes into play. It is all too late now, Mexico could have inadvertently helped Trump to get re-elected. Mexico has less than a month left to show some backbone and demand real American cooperation on the region’s shared challenges and rejecting Trump’s threats once and for all. The relationship between Mexico and the US could have been an example of cooperation under difficult conditions, but that would have required different American and Mexican presidents.

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Scandinavia Veers Left plus D-Day Reflections as Trump Storms Europe

Dr. Arshad M. Khan

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Mette Frederiksen of the five-party Social Democrat bloc won 91 of the 169 seats in the Danish parliament ending the rule of the right-wing Liberal Party group that had governed for 14 of the last 18 years.  The election issues centered on climate change, immigration and Denmark’s generous social welfare policies.  All parties favored tighter immigration rules thereby taking away the central issue dominating the far-right Democrat Freedom Party which has seen its support halved since the last election in 2015.

Ms Frederiksen promised more spending to bolster the much loved social welfare model and increased taxes on businesses and the wealthy.  A left wave is sweeping Scandinavia as Denmark becomes the third country, after Sweden and Finland, to move left within a year.  Mette Frederiksen will also be, at 41, the youngest prime minister Denmark has ever had.

Donald Trump has used the 75th anniversary of D-Day commemorations to garner positive publicity.  The supreme promoter has managed to tie it in with a “classy” (his oft-chosen word) state visit to the UK spending a day with royals.  It was also a farewell to the prime minister as her resignation is effective from June 7.  Add a D-Day remembrance ceremony at Portsmouth and he was off to his golf course in Ireland for a couple of days of relaxation disguised as a visit to the country for talks — he has little in common with the prime minister, Leo Varadkar, who is half-Indian and gay.

Onward to France where leaders gathered for ceremonies at several places.  It is easy to forget the extent of that carnage:  over 20,000 French civilians were killed in Normandy alone mostly from aerial bombing and artillery fire.  The Normandy American cemetery holds over 9600 soldiers.  All in all, France lost in the neighborhood of 390,000 civilian dead during the whole war.  Estimates of total deaths across the world range from 70 to 85 million or about 3 percent of the then global population (estimated at 2.3 billion).

Much has been written about conflict resolutions generally from a cold rational perspective.  Emotions like greed, fear and a sense of injustice when unresolved lead only in one direction.  There was a time when individual disputes were given the ultimate resolution through single combat.  Now legal rights and courts are available — not always perfect, not always fair, but neither are humans.

It does not take a genius to extrapolate such legal measures to nations and international courts … which already exist.  Just one problem:  the mighty simply ignore them.  So we wait, and we honor the dead of wars that in retrospect appear idiotic and insane.  Worse is the attempt to justify such insanity through times like the “good war”, a monstrous absurdity.

It usually takes a while.  Then we get leaders who have never seen the horror of war — some have assiduously avoided it — and the cycle starts again.

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To Impeach Or Not To Impeach? That Is The Question

Dr. Arshad M. Khan

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Robert Mueller let loose a thunderbolt midweek.  Donald Trump had not been charged, he said, because it was Department of Justice policy not to charge a sitting president.  Dumping the issue firmly into Speaker Nancy Pelosi’s lap, he reminded us of the purpose of the impeachment process.  According to Mueller there are ten instances where there are serious issues with the president obstructing justice adding that his report never concludes that Trump is innocent.

So here is a simple question:  If Mueller thought the president is not innocent but he did not charge him because of Justice Department policy, and he appears also to favor impeachment, then why in heaven’s name did he not simply state in his report that the preponderance of evidence indicated Trump was guilty?

Nancy Pelosi is wary of impeachment.  According to the rules, the House initiates it and when/if  it finds sufficient grounds, it forwards the case to the Senate for a formal trial.  The Senate at present is controlled by Republicans, who have been saying it’s time to move on, often adding that after two years of investigation and a 448-page report, what is the point of re-litigating the issue?  They have a point and again it leads to the question:  if Special Counsel Mueller thinks Trump is guilty as he now implies, why did he not actually say so?

Never one to miss any opportunity , Trump labels Mueller, highly conflicted, and blasts impeachment as ‘a dirty, filthy, disgusting word’,  He has also stopped Don McGahn, a special counsel at the White House from testifying before Congress invoking ‘executive privilege’ — a doctrine designed to keep private the president’s consultations with his advisors.  While not cited anywhere in the Constitution, the Supreme Court has held it to be ‘fundamental to the operation of government and inextricably rooted in the Separation of Powers under the Constitution.’  Separation of powers keeps apart the executive branch, the legislature and the judiciary, meaning each one cannot interfere with the other.

Nancy Pelosi is under increasing pressure from the young firebrands.  Rep Alexandra Ocasio-Cortez has already expressed the view that it is time to open an impeachment inquiry against Trump given the obstruction of lawmakers’ oversight duty.

Speaker Pelosi is a long-time politician with political blood running through her veins — her father was Mayor of Baltimore and like herself also a US Representative.  To her the situation as is, is quite appealing.  Trump’s behavior fires up Democrats across the country and they respond by emptying their pockets to defeat the Republicans in 2020.  Democratic coffers benefit so why harm this golden goose — a bogeyman they have an excellent chance of defeating — also evident from the numbers lining up to contest the Democratic presidential primaries, currently at 24. 

Will Trump be impeached?  Time will tell but at present it sure doesn’t look likely.

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