Understanding American Capitalism, Its Consequences & Alternatives
By Joel C. Magnuson // 366 pp, Pilot Light, 2007
A book review by Patrice Greanville
Michael Douglas as the memorable Gordon Gekko in the film Wall Street, with a character based on the real-life buccaneer conglomerateur Ivan Boesky.
"The richest one percent of this country owns half our country's wealth, five trillion dollars. One third of that comes from hard work, two thirds comes from inheritance, interest on interest accumulating to widows and idiot sons and what I do, stock and real estate speculation. It's bullshit. You got ninety percent of the American public out there with little or no net worth. I create nothing. I own."—Gordon Gekko to Bud Fox (Wall Street, 1987, directed by Oliver Stone)
This is an important book about a vast and important subject—economics—which, except for hermits and recluses living in the wilderness, affects just about everyone, every single day, in more ways than most people realize. Understanding economics—or rather, to be more precise, the political economy, a term I amplify later— is critical to any person wishing to make sense of the world, and essential to choosing rationally how to position oneself on the political map.
It's obvious that if you really understand what's going on in society, and your place in it, especially the larger issues and behaviors that define what a healthy and truly democratic society is all about, you're not likely to vote against your own interest—shoot yourself in the foot, so to speak— nor give your allegiance to criminals and scoundrels in the political class, nor act in a boorish or wantonly selfish manner injurious to the majority of your fellows. Yet that is exactly what we continue to observe among broad segments of the population of many nations, most notably the US (think of "the red state syndrome"), where such "irrational" voting patterns have become so scandalously common as to make the American electorate something of an enigma if not a laughingstock to many observers around the globe. So how do we explain this? The short answer is conditioned behavior injected from above, or "false consciousness."
So where does this "false consciousness" come from, how does it benefit the ruling classes, and how does the discipline of economics fit into all this?
Fountainheads, uses, and effects of false political consciousness
Before we examine directly the question of economics from both mainstream ("neoclassical") and unorthodox perspectives, the latter the subject of Joel Magnuson's compelling volume Mindful Economics, we might profit from taking a short detour into the larger historical picture defining false consciousness in our age, if for no other reason than to better visualize the significance of having the social sciences, and economics, in particular, contributing powerfully to the misleading brew we suffer from. For it bears saying upfront: Mainstream economics in its present (bourgeois) form is a huge fount of authoritative disinformation about the real world, whose cascading toxic effects can be located in practically all corners of society where the public is herded for answers.
Manipulation an old story
The rise of modern propaganda as a tool of governance was largely inevitable, hardwired almost in the evolution of our species through the various highly imperfect stages of its grand journey (which still continues), from primitive, unconscious communism to scientific, deliberate communalism.
Since the arrival of class-divided society on the stage of history thousands of years ago, chiefly as a result of agriculture, sedentarism, etc., the puny privileged minorities at the top have relied on some form of false consciousness or ideology (backed up by liberal applications of violence when circumstances dictated it) to keep the disorganized majorities pliant, divided, and in check. Religion and the monopoly of violence by the upper classes and their henchmen—and later the modern nation state—served this purpose admirably for many centuries, but with the emergence of the newfangled democratic ideas in the wake of the French revolution—and associated notions of egalitarianism, secularism, and broad enfranchisement introduced by the ascendant European middle class (the bourgeois) in their effort to attract as many supporters as they could in the struggle against the decrepit feudal order—more refined and updated methods of social control became necessary. The rapid strides made by science and technology over the last 150 years helped immensely in this regard, so it didn't take too long for new modalities of control to develop. It's noteworthy, nonetheless, that modern propaganda embedded in myriad platforms, from radio and television to mass circulation newspapers, etc., did not retire its ancient counterpart; nor has it completely done away with the necessity of state violence against determined dissidents. It has simply added another monumental weapon to the arsenal of the upper classes—in today's world, mostly the corporate bourgeoisie—to shape the fate of nations according to their whim.
Adam Smith: Often invoked, rarely read.
False political consciousness has always worked to prop up the status quo. In the 14th century, for example, embedded in fanatical religiosity and ignorance, it justified feudalism. In our time, it props up capitalism and its offshoot, imperialism. As such, it presents all true democrats (small "d") with a tough challenge: Systemic propaganda in pursuit of false consciousness is not just annoying; it's lethal to the survival of democracy, and its advance inevitably eviscerates every single feature of democracy that make its functioning a reality worth fighting for.
It's fairly obvious that from the ruling orders' perspective the wages of propaganda are substantial. False consciousness among the masses allows the upper classes to run society in their own narrow self-interest while pretending to do so in the interest of all, as true democracy would require. Enormous, mind-boggling wealth and power are thus rapidly accumulated by the tip of the social pyramid in all societies riddled with inequality. In America, an empire on the move for at least a century now, and one of the most income-polarized nations in the developed world, the ideological stranglehold has allowed the US ruling class not only to make a mess of domestic policy, but the freedom to engage with relative impunity in constant and murderous meddling in the affairs of other nations, as the case of Vietnam a generation ago, and Iraq today, so eloquently confirm. And while at the "micro level" commercial propaganda (i.e., advertising) may induce us only to switch from one brand of detergent to another, a fairly innocuous act, at the "macro level" of class or systemic propaganda the effects are far more ominous, since the latter seeks to influence not only the direction but the very nature of the society we inhabit.
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"We make the rules, pal. The news, war, peace, famine, upheaval, the price of a paper clip. We pick that rabbit out of a hat while everybody sits around wondering how the hell we did it. Now you’re not naïve enough to think that we’re living in a democracy, are you, Buddy? It’s the free market, and you’re part of it."—Gordon Gekko, Wall Street (directed by Oliver Stone)
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As might be expected, the instruments to mould opinion are jealously guarded by the ruling classes everywhere; in capitalist America, among other things, literally priced out of the reach of most common mortals. This is logical and consistent with the wealth and power distribution of such societies, where the savvier sectors of the plutocracy understand that the monopoly of opinion manipulation is vital to the survival of the system. Outright repression can certainly ensure a level of compliance, sometimes for a generation or two, but in the long run intimidation cannot guarantee political stability or legitimacy. Only covert mind control can deliver that. Thus by far the most efficient solution is when we are made to carry the chains and prisons right inside our heads. Policing our own actions while still believing in our total freedom is simply a diabolically effective formula ensuring perpetual bondage, but to make it fly, the system requires the confluence of many delicate factors, including the complicity of academia.
The role of academia
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