The Blowback Against Facebook, Google and Amazon Is Just Beginning | Charles Hugh Smith: Of Two Minds

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“The theory of the happy union of capitalism and democracy rests on capitalism creating secure middle-class employment for millions of citizens. Once capitalism only creates a peon-debt-serf class and a 5% technocrat / manager / financier / entrepreneur / speculator class that harvests 70% of the wealth and income, then democracy dies by the slow poison of rising inequality and ever greater asymmetries of wealth and political power.”

Source: Charles Hugh Smith: The Blowback Against Facebook, Google and Amazon Is Just Beginning

Politics, my late grandfather used to say, makes for some mighty strange bed-fellows.

Capitalism was a logical ally for our American (and more generally, Western) representative democratic-republican system during the Cold War, when our enemies were based on a vicious combination of totalitarian political systems and state-controlled economies – and when capitalism was indeed creating secure middle-class employment for millions of citizens.

But this is no longer happening; indeed, quite the reverse. What we are seeing is increasing polarization into “haves” and “have-nots,” into wage-slaves and wealthy overseers. Which leads to the question, is today’s capitalism an ally of freedom, (representative) democracy, and self-determination, or yet another – and apparently voracious and implacable – adversary? At the least, as the above quote makes clear, democracy (or, as in the U.S., a Constitutional Republic) and capitalism are not always or necessarily allies.

This is true in part because of a difference in philosophy and ethos.

Capitalism is, at base, about competition and dominance: various companies, corporations, entrepreneurs, etc., are are in competition to attract consumers, acquire customers, and in the process, accrue wealth and the power that comes with it. Those entities that are most successful eventually dominate the marketplace, at least until a more successful competitor comes along and knocks them off their hill. People are viewed basically as units of production, consumers of goods and services – sources of either labour or money – or both.

Democracy, on the other hand – or again, more properly, representative republics (because a true popular democracy is perpetually dancing on the edge of demagoguery and dictatorship) – is about power-sharing, checks and balances, and the common good. While competition is not absent (particularly during campaign season!), a properly-functioning representative republic is more about cooperation than competition and dominance. People are viewed as citizens and members of society, with a common stake in the success of the enterprise.

Thus, both the methods and the aims of representative democratic–republicanism and those of capitalism – at least, in its current dominant form – are actually quite distinct. But it is also the case that not all forms of capitalism are created equal.

There is a great deal of difference between the kind of extreme crony capitalism, economic oligarchy, or corporate plutocracy in which neo-robber-barons like the aforementioned Google, Facebook, and Amazon are able, by their extreme wealth and the power that wealth purchases for them, to manipulate the machinery of democracy itself, and the capitalism of the Jeffersonian ideal, in which a nation of yeoman farmers, shopkeepers, craftsmen and artisans, merchants and tradesmen, working largely for themselves, own pieces of a widely distributed network of capital and means of production.

I have commented previously on the fact that the present, voraciously predatory form of capitalism is a relative latecomer to humankind, and even within the American experience: the massive shift that took place from the Antebellum (pre-War Between the States) period to the Gilded Age (from c. 11850 to just before the First World War) was a cataclysmic course-change, here in the U.S., from a culture and society in which most Americans worked for themselves (most of those on farms, the rest in the kind of Jeffersonian businesses I mentioned above) to one in which the vast majority of Americans worked for others, for wages.

The modern form of plutocratic capitalism is not the default form, for America – and furthermore, it is not, I think, healthy for any society.

The question, of course, is what can be done about the present crisis; and although the linked article points out – accurately, I think – that blowback is beginning, what form it will take, and what effect, it will have, remains to be seen. But that something needs to be done is, I think, an unavoidable conclusion; lest we end up governed by “Avatar”-style quasi-governmental administrative entities (QGAEs) that are accountable to no one – except, perhaps, their stockholders!

A full return to the Jeffersonian ideal is (sadly, in my opinion) probably pretty unrealistic, in today’s world. But something like Chestertonian distributism may be, as I have posited on more than one occasion, the only route to a system of economics which is human both in scale and in ethos. Every alternative I can think of is frightening.