Listen to Democracy Now interview of Alan Greenspan conducted by Amy Goodman and Naomi Klein, the author of the recently released book entitled The Shock Doctrine: The Rise of Disaster Capitalism. I've uploaded the podcast just below--the interview starts at about the ten-minute mark:
Download democracy_now_monday_september_24_2007.mp3
It interests me that Greenspan considers Bill Clinton a Republican, a point I've often made, and that he is aware of the bad stuff that's happening. He recognizes that wealth in this country is stratifying with the rich getting richer and the poor getting poorer. He recognizes that crony capitalism is a reality in the U.S. system, but insists that it isn't the dominant feature driving the American economy. For him this kind of thing is unfortunate collateral damage associated with the only system he thinks works--namely market capitalism. And he seems to think that the only alternative to it is state socialism.
I was disappointed in Klein's questions and comments; she seemed more interested in a kind of "gotcha" game, trying to pin responsibility on Greenspan for his contributions to the mess we're in, and that kind of thing rarely works in this format. The issues are too complex, and it's easy for anybody, especially someone like Greenspan, to slip off the hook, no matter how culpable he may be. And even if he is, who cares? But she rejected Greenspan's characterization of her as a socialist, defining herself rather as a proponent of a mixed economy, which is essentially what we've had here in the U.S. since the New Deal.
That's really the argument here. It's not between radical laissez-faire capitalists and radical socialists, but between radical capitalists and mixed-economy conservatives. The people who want to preserve the New Deal compromise between free markets and government controls are the real conservatives, because they are trying to conserve institutions that have already been established and despite their flaws have proved themselves effective. The fact that those who now defend the New Deal are considered leftists and that the radical capitalists are considered mainstream moderates shows how twisted our political discourse has become. The Clintons are right-of-center politicians. When push comes to shove, they serve the interests of the economic and political elites who have taken over the levers of power on the national level before serving the needs of the broader electorate. The hatred they provoke from the radical right is a symptom of how irrational and deluded those people really are. When it comes to foreign and economic policy both the Clintons are a lot closer to Ronald Reagan than they are to, say, Ralph Nader or Dennis Kucinich.
And so it follows that I would identify myself as a mixed-economy conservative. And for me the central organizing principle of a mixed economy is subsidiarity. I'm a subsidiarist, and as such an opponent of any system which promotes top-downism as its dominant m.o. But a subidiarist expects government to step in when markets and local organizations can't solve serious problems, be they natural or financial disasters or the institutionalized suppression of rights. (Health care financing, it should be obvious, is such a disaster.)
Few people would disagree with that subsidiarist approach in principle, but I think that many have come to associate the New Deal with big government and the corruptions of pork-barrel politics. But Democrats and Republicans are equal-opportunity offenders when it comes to pork. And the whole problem with pork is a separate issue from the question whether the U.S. system ought to be a laissez-faire market economy, a top-down command economy, or a subsidiarist mixed economy.
Back to the Greenspan interview: I would have been more interested if the conversation got down to basic principles along these lines. Greenspan falls back onto the basic assumption that market capitalism is the only system that works effectively to create wealth. So, for the sake of argument, let's assume he's right on that--that if the only problem is to create wealth, market capitalism is the best system to solve it. But wouldn't he also have to admit that while it solves that problem, it creates other problems, perhaps more serious problems, not the least of which is the Schumpeterian destruction of traditional communities and the traditional values matrices that provide stability and ballast to any social system? Wouldn't he also have to admit that market capitalism has no inherent mechanism that insures a just distribution of wealth? And along those lines, would he not have to admit that market capitalism if left to work without interference inevitably leads to the systematic domination of the weak by the strong, particularly when the weak are uprooted, anomic, and disorganized as a result of the Schumpeterian dynamic alluded to above?
In other words, would it be possible for him to admit that while capitalism creates material wealth, its effects in the cultural sphere are more destructive than creative? Could he admit that it's possible to imagine a healthy society in which wealth creation and getting rich isn't the most important thing? Or that a democratic society might choose to organize itself according to different priorities. And if I could get him to agree on all these points, would it not follow that the only way to avoid the inevitable trend toward tyranny that his Libertarian principles lead to is a strong central government with the power to tax and regulate? Because what other power does the broader electorate have to protect its interests or to promote a democratically determined common good?
Now I've not made a detailed study of Alan Greenspan, and that's why I'd like to sit down and talk with him to find out how he really thinks. (I'd like to sit down with the Thatcherite Andrew Sullivan and have the same conversation.) I do know Greenspan is fan of Ayn Rand, which suggests that he's a radical economic individualist in the Libertarian vein, and I feel safe in assuming he feels more comfortable with Milton Friedman's approach than he does Franklin Roosevelt's. As I've written repeatedly, Libertarianism in the economic sphere is just another name for Social Darwinism. I would ask him if he would accept that characterization of his fundamental worldview. I would then ask him if he recognizes the ways in which Libertarianism creates the conditions for the flourishing of tyranny. I'd ask him if he didn't think that the Libertarian program to remove government restraints on private parties pursuing their interests leads inevitably to the domination of the weak by the strong. If he would insist, as Libertarians often do, that he doesn't want that, I would try to make the case it doesn't matter what he wants; it's what follows inevitably from his premises.
Libertarianism and Rand's Objectivism are third-rate philosophies adopted by people, in my experience, who don't really think things through and either don't accept the consequences of its basic assumptions--or don't care. And the people who support the Libertarian agenda, as for instance promoted by the Cato Institute, often have no idea of the liberty-squashing monster they are helping to create. Libertarians are like farmers who have a hungry-rabbit problem and so import hundreds of coyotes to take care of them. That strategy solved the rabbit problem, but now they have a hungry-coyote problem, and they're not eating carrots and lettuce; they're eating the livestock.
If democracy worked the way it ought to, the government would be more responsive to the economic interests of the broader electorate rather than the interests of powerful minorities, but clearly that's not how it works, especially since the 1980s. If things worked the way they should, one would expect the powerful to use their power to attempt to control both the government and media. And we should expect that a vigilant broader electorate would work hard, using government controls, to prevent the powerful from achieving their goals by using their power of numbers to vote people into office who represent their interests. Or if, as often happens the system is unresponsive through the normal electoral channels, to organize the way, for instance, Solidarity in Poland and the Civil Rights Movement in this country organized.
But we are in the our current predicament precisely because the powerful have behaved exactly as we would expect them to behave and because the broad electorate out of complacency has not done its part to stop them. Political victories for powerful special interests are an almost daily occurrence; victories for the broad public interest are few and far between. It should not surprise us that this is so. The system is no longer responsive in any meaningful way to the public interest because the public has abdicated its responsibility to protect it.
The broad electorate has been for the most part conned into trusting that the powerful are decent people who are doing their jobs as best they can. They see people like me fomenting class warfare and demonizing the rich. I'm doing no such thing. I'm simply describing how the world works. I don't see Greenspan and others like him as evil. He's just a fallible, morally average, normally biased guy who's looking out for his interests and the interests of people in the elite circles of the political and economic spheres with whom he identifies. The system has worked well for him and others in his group, and he has little concern for those who are not in that group.
His motivations are really not that different from how most of us root for our home football or baseball teams. There are exceptions, but most fans don't hate the other teams or wish them ill; they just don't care about them. They care more about their team winning than the other team losing. Humans care about the people with whom they identify, and the interests of everyone else are for the most part invisible or inconsequential to them. That's basic human nature. Hatred only arises when those outside one's identity group pose a threat to one's group's interests. That's when the demonizing dynamic kicks in, and with it the need for the more powerful group to eliminate the threat, no matter what the means, or how disproportionate the means to the real threat posed.
And so what I would like to ask Alan Greenspan, or those who think along the same lines he does, this questions: Do we agree on the basic elements that drive average, self- or group-interested behavior? I assume we do. If so, can we agree that the already wealthy and powerful have advantages in accumulating more wealth and power? If so, can we agree that they are more likely than not to use those advantages? And if they are successful, shouldn't we expect that their success necessarily results in a stratified society in which the already powerful and wealthy dominate the political and economic system and rig it to work in such a way that insures their continued domination?
Hasn't this been the story of human societies from time immemorial. If we allow this stratification to proceed, isn't it logical to assume that it leads inevitably to the destruction of democracy? Isn't it logical to assume that if the government doesn't reflect the will of the people but rather the will of corporations and other economic and political elites, the American system morphs into a crony capitalist system in which government grows not smaller but bigger to serve the interests of these elite groups? Isnt' that precisely what we're seeing as in the Medicare Prescription Drug Bill? If we are not a crony capitalist system like Indonesia now, isn't it clear that we're on the track to becoming something very much like it? What does Greensapn think are the counterforces that will prevent our evolution in that direction? Try to stand back from the politics of the Democrats or the Republicans. This is not about political ideology; it's about common sense and seeing what's in front of your nose.
There is only one answer to the question about counterbalance, and that's a vigilant, aroused alliance of groups and individuals who are not in those elite circles, but who organize themselves into a political force that counterbalances the interests of the elites. That's not socialism. It's what the New Deal Democrats used to do, but they don't anymore. This alliance ought not to have in mind the goal that government must run everything. Rather it's goal should be the maintenance of the mixed economy that has been the system in the U.S. and in the European social democracies since the 1930s.
This alliance must fight to insure that the government be kept out of the hands of those who seek to transform it into a crony capitalist system. They must use the tax code and other controls to keep these interests in line, and they have to work to exert similar controls on the emerging global system. Right now that simply is not our situation. Because at the national level both Democrats and Republicans serve the interests of these elites and not the interests of the broader electorate. These people in the political class tell the broader electorate what they want to hear, and then do what's in the interests of the elites.
And so while it's clear what must be done if any kind of real democracy is to be preserved (or recovered) in America, it's also clear that there does not seem to be the will or the imagination in the broader electorate to do it. And so the long-term trend is toward the historical norm, which is a stratified, authoritarian society. And that's the reason for my pessimism. I'm talking now about developments over the next ten to fifteen years. It may not turn become quite the nightmare society that Orwell envisioned in 1984, but why shouldn't it? I don't see anything that can provide a robust resistance to the trends that seem inevitably to be leading in that direction.