Saturday, 15 August 2015

Plutocracy: a lesson for citizen education

Let us begin with a quotation from a politician who embodied the plutocratic approach to government. US Senator Boies Penrose (Republican) told his big business supporters how it was going to work:

"I believe in the division of labor. You send us to Congress; we pass laws under which you make money ... and out of your profits, you further contribute to our campaign funds to send us back again to pass more laws to enable you to make more money."

That was back in 1896, and in the subsequent century, Penrose’s strategy has become entrenched in the operations of political parties on the Right in the US, the UK, and many other countries too. The aim is to concentrate wealth more and more in the hands of the corporate elite. To do that, the earnings and job security of everyone else must be curtailed as much as possible. And to deflect public attention from the endemic exploitation, unions, immigrants, the poorest and the jobless are to be routinely vilified as scapegoats.

Instead of teaching how democratic ideals are supposedly upheld or how myriad government institutions function, each new generation of citizens should be taught how plutocracy has taken over the running of our state and society, and how the many will be made to serve the narrow interests of the wealthy elite until the relentless manipulation is finally exposed and overturned.

A historical case study is always handy: if we go back to Senator Penrose, we find him showing the way for others to follow in subsequent decades. In the run-up to the Presidential election of 1920, he discovered that the candidate in the lead to secure the Republican Party’s nomination was Leonard Wood, an advocate for profit sharing and employee share ownership, and supporter of Teddy Roosevelt’s trust-busting policies [Note 1].

Penrose sent a message to Wood, offering to swing the remaining delegates behind him, provided Wood would in return give Penrose and his oil interest friends control of three business-related posts in his cabinet. After Wood refused, Penrose used his connections in the party to push enough votes in the direction of Warren G. Harding to get him the nomination.

Harding went on to win the 1920 election, and led a presidential administration mired in scandals, resignations and corruption. Every major policy was designed to please big business, with taxes cut for the rich, and workers enduring numerous wage reductions. Harding was followed as President by Calvin Coolidge, and then Herbert Hoover. Together their 12 years of plutocratic Republican Presidency brought the US and then the world into the Great Depression.

In response to Democrats’ efforts from F.D. Roosevelt to Lyndon Johnson to correct the de-stabilising bias of the Right’s plutocratic policies, the Republicans dedicated themselves fully to the Penrose doctrine of capturing government institutions solely to serve the superrich. In Britain, their ideological kin, the Conservative Party, has since the 1970s adopted exactly the same approach.

And these parties will go on convincing many people to buy into their exploitative agenda unless we begin to explain why in fact not all parties respect the interests of all citizens regardless of their wealth, and teach everyone about the dangers of plutocracy as a growing and highly corrosive force.

[Note 1: Although Teddy Roosevelt became US President for one term as a member of the Republican Party, his progressive policies proved too much for the party and when he sought re-election, he stood as the candidate for the Progressive Party.]


Woodman59 said...

This is a very helpful historical view, but I have to wonder whether it is the central consideration at the moment?

The reason is that I have a brother who voted Conservative in a key marginal constituency in the recent election. As a sole trader, he has seen the landscaping business he has painfully trained up in and built from scratch devastated almost overnight by the influx of Eastern European workers.

He has tried to diversify and train in more internal work, such as kitchens, but finds that more experienced Eastern European craftsmen can even construct entire kitchens and transport them over for maybe half the cost of equivalent UK based operation.

However good and creative his work has been - the ultimate consideration is now almost always price.

However bad the plutocrats are, he obviously feels that their policies will still give him more hope than those on the left who claim to represent "hard working people", and that further taxing of the rich more will only drive them away from the UK.

There will be other issues, too, I'm sure - such as the fear of break up of the UK under Labour - but the economic issue about Europe would seem to be the major one.

Quite frankly, however progressive I am, it is difficult for me to know what to say.

Woodman59 said...

Doing some research on my own question, might Jeremy Corbyn prove to be the person most able to develop the Eurosceptic line within Labour, and bring together voters from across the political spectrum?

I was born in Amsterdam, and could speak no English when I arrived here as a child, so have always had a European sensibility, but the naive yoking together of vastly disparate economies has clearly been highly destructive in many ways, much as we can also benefit from a multi-cultural community - but really only if and when integration takes place.

Henry Benedict Tam said...

How wages are suppressed, and why they are kept down by bringing in workers from abroad, are all connected with the plutocratic agenda of maximising gains for the wealthy elite, and pushing everyone else down towards a more precarious economic position. And to make sure those who have lost out blame someone else, the foreign workers serve a second purpose of being convenient scapegoats. That is how plutocracy works.

Woodman59 said...

I appreciate that overall - this is how the super wealthy operate, but the issue in question here is that the people who really opened the gates to these recent destructive levels of foreign workers were not 'plutocrats' as I understand it, but the 'New Labour' leadership. This has been clearly admitted by some of those involved.

Consequently, I feel really confused - I find it difficult to trust a political party whose macro-economic judgement has proved so poor in such a critical respect. The personal financial integrity shown by someone like Jeremy Corbyn is wonderful, but here the ideological detachment from reality in terms of foreign policy (i.e. the anti-Americanism, and what accompanies and flows from that hard Left perspective) is what makes me feel extremely uncomfortable.

Henry Benedict Tam said...

There are politicians who side with the plutocratic agenda in various parties - and none more so than those in the Conservative Party. One cannot talk about the readiness to allow immigrants into the UK without addressing the issue of how much freedom Britons should expect to have in moving to other countries. I would not sign up to a sweeping statement such as 'destructive levels of foreign workers'. What has been undermined is the level of pay, and that is contrived by employers. I would also reject labels such as 'anti-Americanism', 'hard left' and many others thrown in Corybn's direction without any substantial evidence. The bottom line is do we back those who always prioritise the richest 1%, or do we support those who try to improve the lives of the vast majority. Privatise the NHS or save the NHS? Frack for profiteering or invest in renewables? When one adds up the answers to these questions, the political choices become clearer too.

Woodman59 said...

Completely agree about where the overwhelming political support for plutocracy is, of course - but for the period in question Labour simply seemed to lose the plot over the freedom of movement issue.

I happen to have ANOTHER brother who has tried for 10 years or so to make a go of it in Romania. Complete disaster - impossible for him to make ends meet over there doing any kind of basic job, and actually, the regulations for him are still far stricter over there for him - than they are for the Romanians here. He's now had to leave two children born in Romania behind and come back to the UK to try and support them. Between vastly unequal economies it's not remotely a question of 'two-way' traffic.

Surely it is a question of supply and demand? When a huge new supply of (non-unionised, of course) workers from abroad is politically made available and willing to work at up to half the previous rate - how can we blame employers for taking them on instead of UK workers?

Below is the kind of objection against Corbynite perspectives that are being referred to -

I was out with 38 Degrees trying to raise awareness about TTIP the other day, so no doubt about the need for action against plutocrats, but it was really very hard indeed to get people in general engaged on the issue. I'm in a seat which I think has probably been Labour since the movement started, and hopefully is safe, but with increasing numbers of Africans who are much more used to having authoritarian governments with minimal state welfare structures. This is a significant concern - but to me the overwhelming question is about what has happened to tip the marginals over - and what might bring them back.

Woodman59 said...

Maybe I was a bit harsh on the New Labour leadership when it came to further implementing the "Open Borders" policy - possibly not. I've been trying to catch up on some of the long political back history where it seems pro and anti EU positions have swung so widely around between Labour and Conservative perspectives.

I was a child in '61 when the TV crews turned up at school and created a large model of Europe on the playground, dressed some of us up in the various national costumes, and proceeded to roll the cameras for a dramatic cutting of the border ribbons, as part of the then Labour pro-European drive.

Throughout my life, meeting people from other parts of the world has provided incredible richness and joy - but also increasingly, far too often - considerable pain. That idyllic picture we were sold as children has often turned into more like a nightmare. The pace of change within many localities has been too overwhelming.

There is often remarkably little in the way of integration - the incomers often far more interested in maintaining and even imposing their cultures - than of truly joining us.

Maybe this is starting to reduce now, but among established immigrants I have seen high rates of exploitation of generous welfare provisions. Social and health conditions can be vastly exaggerated - not remotely properly checked due to sensitivity over nationality and age - the money frequently creating excessive power and wealth for select individuals in the countries of origin.

For those not receiving benefits, long-standing traditions of commercial "fair-play" in the High Street can be swept away in an instant as people with the lower overheads of living in poor, short-term housing conditions, desperate to make a self-employed entrance - may easily, and without compunction effectively declare "all out war" on existing business not by fairly competing on service but rather by vastly undercutting them in price.

I have seen that every possible opportunity is typically sought - to utilise provisions provided for out of the public purse over the last 60 years, such as Council housing and community diversity provision - for private gain.

However much I appreciate the tremendous pros - these are some of the considerable cons that I have experienced - but not heard discussed on the Left. Even as we try and do all we can to help with the current refugee crisis - it still seems important to have some plain-speaking on these matters at the same time, without it being seen as a right-wing agenda.

No-one wants us to experience a sense of universal human "brotherhood/sisterhood" more than someone like me, but this is something very profound that takes far, far more than the simple lifting of border controls - which can easily do as much, or even more, harm - than good.