Roosevelt, Fascism, Woke Capitalism and 'Coups Against Democracy' (part two)

 To utterly mangle a famous Bob Dylan lyric, “history doesn’t rhyme, it swears”.

In April 1938, in a speech to the American Congress, Franklin Roosevelt said that “unhappy events abroad” (meaning Europe) had imparted two “simple truths”.

The first was that democratic government was threatened by the “growth of private power to a point where it becomes stronger than [the] democratic state itself”. That, in essence, was Fascism, he said.

The second was that the “liberty of a democracy is not safe if its business system does not …. produce and distribute goods in such a way as to sustain an acceptable standard of living”.

“Both lessons,” said Roosevelt, “hit home”.

The Hubris of Wealth

Sadly, 88 years on, they are hitting home again. Though our situation is probably more perilous in that the American president is the “essence” of the problem, rather than the one stating its existence.

A general myopia regarding the situation also makes combating it far more difficult. Many understand Roosevelt’s second “truth” – that falling or stagnating living standards provide fertile ground for far right and Fascist parties. Anything from high rents, to failing public services, to a callous ‘welfare’ system are blamed on immigrants or lazy freeloaders, or both.

But the first “truth” – interestingly Roosevelt placed it first so as to emphasise it – is less appreciated. But, as part one I hope demonstrated, “the concentration of private power without equal in history” is now actually worse than it was in the 1930s. And its producing similar effects.

So while Fascism is incubated by social conditions that affect the mass of people and unsolved and misunderstood economic afflictions, it also has a corollary at the top of society.

As Roosvelt noted at a time when Nazism thought it would last a thousand years, economic concentration and the growth of corporate power leads to a hubris among rich capitalists that they can discard democracy and institute a government seamlessly suited to their profit-maximising needs. This allies with the Fascist impulse at the bottom of society to produce a low-tax, deregulatory political project that, on its reverse side, constantly seeks scapegoats to blame for problems that are never addressed.

First on the Fascist ‘To Do’ List

We can see this in the actions of classical Fascism – the political environment that Roosevelt was confronting. The absolute first priority of the Hitler regime in Germany, as befitting its bankrolling by wealthy industrialists, was to repress the Left and puts its activists in concentration camps like Dachau. This started with the Communists in February 1933, and then within weeks extended to the Social Democrats and the trade unions. Only after this had been done, did the Nazis turn their attention to Jews, initially through a boycott of Jewish businesses. “There were relatively few Jews among these early prisoners of the Third Reich,” writes historian Arno Mayer in Why did the Heavens not Darken? “and all of them were arrested for being left-wing politicians, lawyers, or literati.”

The original Fascist regime, Mussolini’s in Italy, ceded a lot of power to a coterie of mainly non-Fascist economic advisers. As shown by Clara Mattai in The Capital Order, they instituted a system of brutal austerity and privatisation, which seamlessly dovetailed with Il Duce’s physical smashing of the workers’ movement, and coincidentally caused a massive, though far from unwelcome, slump in living standards.

Roosevelt, in keeping with someone who didn’t consider himself a socialist, thought the intrinsic problem with Fascism was that it rested on a particular type of capitalism. This was the cartel system – groups of companies that become so powerful they can fix prices, distort markets and take over governments so their interests are tended to.

And it is true that, contrary to the contemporary Right’s absurd portrayal of it as socialistic, Nazism had a private profit-making impulse at its core. As Hannah Arendt relates in Eichmann in Jerusalem (p 40), IG Farben, Krupp and Siemens all had plants in the vicinity of Auschwitz and made a pot of money by ‘employing’ its inmates as slave labour.

Nazism and Cartels

As the Rooseveltian moment reached its zenith – i.e. before the Cold War took root and the US started installing and supporting right-wing military dictatorships across the world – the cartel system was blamed for Nazism. The chairman of the US Senate’s Subcommittee on War Mobilization stated that the cartel system was “in great measure” responsible for the Hitler regime. Roosevelt himself wanted the German cartels eradicated and a “Decartelization” team was dispatched to post-war Germany to do just that (with the exception of IG Farben unsuccessfully).

But as shown by the fact that the German cartels existed prior to Nazism, and in fact were instrumental in helping Hitler into power, cartelisation is always an inherent possibility with capitalism. This is especially the case when – as they have been since the Great Depression –economic downturns are nipped in the bud by government intervention and a widespread destruction of capital is not permitted to happen.

In 2012, two American Marxian economists, in a book called The Endless Crisis said that economic concentration, though frequently denied, was greater than it had ever been in the past. They cited another economist who found 22 “barriers to entry” used by firms to exclude rivals, prima facie evidence of a cartel system. And given what has happened in the interim, including a spate of mergers and acquisitions in the wake of Covid, economic concentration has almost certainly become more extreme.

In such circumstances, the temptation to wield the power of market influence and wealth can become irresistible.

Last year, the anti-monopoly group the Balanced Economy Project and the NGO Global Justice Now, urged an investigation of three pharmaceutical giants who had paused investments worth £1.5 billion as prelude to negotiations with the government over drug purchases by the NHS. This, they said, “showed signs of cartel-like behaviour”.

As it turned out, the Competition and Markets Authority, permeated with the Starmer (read now Burnham) government’s growth mantra and horror of seeming to impair business ‘confidence’ refused to investigate. The subsequent talks, carried out under the shadow of threats to withdraw investments, saw the NHS promise to double spending on new drugs at a cost of £64 billion.

Billionaires and the Far Right

It is not hard to see an echo of the German cartels’ role in the rise of Nazism, and participation in its horrors, with billionaire sponsorship of the far-right today. Elon Musk pays Tommy Robinson’s legal costs, calls for the British government to be overthrown and supports Restore Britain. Palantir founder Peter Thiel thinks freedom and democracy are incompatible, while backing Donald Trump and the far-right. Trump’s immigrant detention centres are built and operated by private corporations.

Conveniently, those supported by these techno-billionaires (or trillionaires in the case of Musk) promise to tear down regulations banish abominations like a wealth tax. According to Facebook whistleblower, Sarah Wyn-Williams, offering electoral campaign tools to the far-right Alternative fur Deutschland and the Front National in France was seen as a way of “getting close to these political parties and helping them into government” so as to “stop government from regulating Facebook”.

Famed economist Daron Acemoglu (co-author of the noted book Why Nations Fail) has even suggested that what he calls “the capitalist state” may be prompted, by growing automation and an ever-rising stock of capital, to launch a “coup against democracy” and institute “repression”. He hypothesizes that for quite rational reasons – the desire to maximise profit – “democratic decision-making will become less and less attractive to capitalists”.

The Questionable Allure of Fascism

But a counter-question can be posed. For most corporations – as opposed to some idiosyncratic ultra-wealthy individuals thrown up by this age of mammoth inequality – is backing Fascism is really necessary or even desirable? As alluded to above, Clara Mattei in The Capital Order showed that in the 1920s, both Britain and Italy imposed brutal austerity – in the form of spending cuts, high interest rates and repression of trade unions. But while the latter became Fascist and abolished elections, the former didn’t. In fact, Britain instituted its recession-inducing austerity policies in the same decade that it experienced universal suffrage for the first time.

The Anti-Trump Corporation

It’s also true that for some corporations, elements of the modern Fascist script stick in the craw, primarily because they alienate senior staff members. Disney, for example, perhaps the archetypical American corporation, publicly criticised a Florida law which restricted teaching about sexuality and gender identity in schools, a kind of American version of Thatcher’s Section 28. This was even at the cost of a two-year long legal battle with the Trumpite state governor.

But though it personified corporate opposition, Disney was far from alone. Altogether 337 corporations, including famous names like Apple, Pepsi, Pfizer, Facebook, Mastercard, Citibank and Amazon  signed a statement bemoaning similar state bills across the country that “single out LGBTQ+” people and “have a negative effect on our employees, our customers, our competitiveness, and state and national economies.”

Some American corporations have also retained their DEI policies in the face of threats from the Trump administration. Clearly the ogre of the woke corporation, invoked by the MAGA movement a few years ago, still exists under the surface. It’s a phenomenon that simply didn’t exist the last time Fascism bestrode the world. The late David Graeber brilliantly diagnosed a “culture of resentment” that hones in on a corporate Left elite of HR managers and administrators who police language and acceptable behaviour. “The mainstream Left largely controls the production of humans,” he wrote, “The mainstream Right largely controls the production of things”.

Despite Trump and Elon Musk and crypto-billionaire funded Nigel Farage and Rupert Lowe and Tommy Robinson, this division within the corporate world is very real. But although sections of the corporate elite may passionately hate contemporary Fascism, they are no more predisposed to “democratic decision-making” than the Right. They may be dissenters in the culture war but in the economic war they are resolutely on-message.  In fact, though universal suffrage is an unadorned fact, few powerful people actually like it. As seen by their reaction to losing control of the UK Labour party a decade ago, centrists loathe democracy too.

Be that as it may, in the absence of a serious working-class left-wing revolt, an alliance between the corporate Left and the corporate Right, though they both detest Marxism and view democracy with visceral distaste, seems unlikely.

The surreally limited vision of ‘democracy’ of Margaret Thatcher’s mentor Friedrich Hayek – representatives serving 15-year terms with electors only able to vote for them once in their lifetimes – may be appealing to right-wing libertarians like Peter Thiel but the schisms run too deep for it to become a charter for corporate freedom.

Acemoglu’s “capitalist state” launching a “coup against democracy” presupposes a unity of purpose that was only achieved sporadically in the 1920s and ’30s and would be even harder to cement today. In any case, the dangerous beast of democracy has been suitably tamed in the last few decades by methods such as austerity, debt and the judgement of financial markets. If all else fails, Machiavellian techniques can be employed to see off insurgencies like those of Corbyn or Saunders.

The Shifting Battlefield

Though this last may facilitate the rise of the far right by channelling grievances in that direction, that too has a function for the corporate elite even if these parties do not attain power. The pressure of right-wing opponents promising a bonfire of regulations and more austerity results in establishment parties, even ostensibly ‘left-wing’ ones, committing themselves to similar, though maybe not quite as extreme, policies. Labour Chancellor John Healey, for example, wants further deregulation of the finance sector, accompanied by “fiscal discipline” (read austerity), while the Tories and Reform scream ‘not enough’. Thus, the battle lines are drawn, while the battlefield itself moves inexorably to the Right.

In 1931, American philosopher John Dewey called politics “the shadow cast on society by big business”. Four decades later the Deweyite Noam Chomsky said that corporations were, “in political terms fascist.” Organisationally, there is “tight control at the top and strict obedience has to be established at every level”. The corporation cannot help but shape democracy in its image. At root the problem is corporate power. While it exists, democracy will always be mutilated. It just depends how badly it is mauled.

Come you Masters of War ... I'm just want you to know I can't see through your masks

The Peter Jackson edited Get Back Beatles documentary is a fascinating insight into the way the most famous band in the world worked together a year before splitting up for good. It forces a revision of the idea that their rehearsals were marked by a simmering acrimony as suggested by the contemporary – and now suppressed – film Let It Be, which was based on the same footage. The much longer Jackson compiled film suggests they actually got on quite well, despite George Harrison flouncing off at one point. We see the Beatles working as a group on songs – such as Harrison’s 'All Things Must Pass' and Lennon’s 'Gimme Some Truth' – that would later become some of their authors’ most famous solo efforts.

It’s easy to forget you are watching fly on the wall footage that is over half a century old. And some of the most innocuous scenes, on closer inspection, reveal their age. Take the debate in the film over the idea ؘ– proposed by original filmmaker Michael Lindsay-Hogg – that the Beatles should hire a ship to take them to Libya where they would perform in a Roman amphitheatre on the coast (the Get Back sessions were meant to prepare for a TV performance which would eventually morph into the rooftop concert). “How are you going to get a ship in a couple of days?” asks Ringo Starr. “We got the American Navy for How I Won the War” says John Lennon, a reference to a 1967 film he acted in. To which Starr responds, “Yes but they were passing by and you only got them for a few hours”. Cue images from the film of the actors disembarking from a D-Day style landing craft.

Toy Story

To utilize a popular phrase, that could never happen nowadays. Something that is made painfully evident from the documentary Theaters of War which shows how the US military now meticulously controls the content of films and TV programmes, to the extent of insisting on line by line script changes to make sure they appear in a desirable light. In 2023, the PR savvy U.S. Navy would never allow their ‘toys’ to be used in a film as subversive as How I Won the War. Director Richard Lester said the film was an “anti-anti-war film” in that it portrayed war as intrinsically hostile to humanity itself rather than just being against the war crimes of the other side. The plot shows the battalion coming to the conclusion they have to kill their commanding officer as his incompetence is leading them to their deaths (unfortunately they don’t and it does). The effect is rather muted by the fact that he is played by Michael Crawford, later to become famous as Frank Spencer in Some Mothers Do ‘Ave ‘Em (although to be fair people wanted to kill him too).

According to Theaters of War, thanks to incredibly persistent Freedom of Information requests, it’s clear that “thousands upon thousands” of films and TV shows have been “rewritten at script level” by the Pentagon and the CIA. If the filmmakers want military cooperation – access to all those aircraft carriers, fighter jets and troop extras – they have to hand over their entire script for vetting. If they don’t, they don’t get to use the military equipment, which is usually essential for box office success. If they do agree, they have to sign a contract and the Pentagon “are effectively like another producer”.

This ‘help’ is most obvious in blockbuster movies like Top Gun (which according to the Pentagon “completed rehabilitation of the military’s image which had been savaged by the Vietnam War”) and its 2021 sequel, Pearl Harbor, or The Hunt for Red October. And it’s evident in TV series like 24 and Homeland which bear the hallmarks of the CIA’s decision to follow the Pentagon’s lead and open an office to liaise with television and cinema in 1996.

The Pentagon Universe

The national security state is also integral to the greatest ‘cinematic’ innovation of this century – super hero movies. The original script for Iron Man, for example, had its hero, Tony Stark, battling against the arms industry. But by the time the film went into production this had entirely flipped. In the actual 2008 film, he inherits his father’s arms business and the subsequent franchise is “an outright celebration of the arms industry”.

In fact, super hero movies like Man of Steel or Captain Marvel are the perfect advertisement for new military ‘toys’. And the Transformers franchise is little more than a showcase for new weapons. Until 1988, rules stated that the Department of Defense should only help films achieve “authenticity” and “dignity”. Subsequently, however, these were enlarged to allow promotion of “public understanding”, help with recruitment and support of government policy.

And this mission creep has had tangible effects. Captain Marvel was “a recruiting bonanza, a vehicle for the Air Force to reach young women”, channelling, according to its star, Brie Larson, “the spirit of the Air Force”. 2021’s The Suicide Squad has an assortment of super-hero bad asses overthrow a fictional anti-American government in Latin America. Any similarity to actual events is strictly coincidental.

These are just stupid films for kids, you might object, and besides anti-war films do get made. Both demurrals have some validity but don’t erase the basic problem. Super-hero films have a cultural impact way beyond their immediate fan base. Apart from being some of the highest grossing movies of all time, they reach a far wider audience by being constantly repeated on prime time TV. Critical war films – for example Platoon, Born on the Fourth of July or possibly 2005’s Jarhead – do get produced but they are swimming against the current. Oliver Stone’s Vietnam films were delayed for years because of their “unacceptable themes”.

Rehabilitating Nukes

We are talking about a gradual cultural seepage. According to one interviewee, filmmakers are well aware their films are going to get vetted, so “they write their scripts in ways they know will ultimately please the Pentagon …. People self-censor and tone down any potential critical view.”  Much like journalists, you might say.

This process of cultural acclimation can be sent in a frankly scary (pun intended) segment about what happened to Godzilla. In the original 1954 Japanese film, Godzilla was literally created by hydrogen bomb testing and survivors of the monster’s attacks had radiation poisoning. Godzilla was “an allegory for the U.S. nuclear bombing of Japan”. This association survived in the 1998 Roland Emmerich version but by the 2014 iteration the U.S. Department of Defense was involved. A passage in the original script where a character recalls how their father survived the Hiroshima bomb was replaced by musings about the “arrogance of man”. And far from being the source of the mutation, nuclear weapons were the solution. Nuclear tests in the 1950s were actually attempts to kill Godzilla.

Revealingly, the 2019 reboot Godzilla: King of the Monsters was made without Pentagon assistance but stuck with the “nukes as heroes theme”. The filmmakers conclude: “It’s hard to imagine a more complete reversal. This long time warning about the dangers of proliferation is now an extension of the U.S. military and something of an advertisement for the bomb”.

Essentially, and terrifyingly for the future of humanity, nuclear weapons are being ‘rehabilitated’ and Hollywood is integral to that redemption. The subdued reaction to the possibility that nuclear weapons may be used in Ukraine may be evidence that it is having the desired effect.

That’s Entertainment

What Theaters of War unmasks is just how PR-saturated our popular culture is. With all due respect to Noam Chomsky, this is not about manufacturing consent through news and current affairs coverage. It is a form of propaganda that works through the slow accretion of subconscious associations and acquiescence with outwardly fictional, often absurd, depictions. “This is more insidious than state control and state-produced propaganda,” one interviewee notes, “because it passes off as just entertainment.”

As one internal Pentagon document observes, “Features films reach far greater audiences than any single news media story about the actual events. Audiences will voluntarily sit through a two hour ‘infomercial’ [about an army operation]”.

The contrast with the 1960s and How I Won the War could not be starker. That decade and the following one were laden with overtly critical, and fundamentally subversive, films about war. Paths of Glory, Dr Strangelove, The Hill, The Battle of Algiers, The Bed Sitting Room, Oh! What a Lovely War, The Charge of the Light Brigade, Catch-22, M*A*S*H and Apocalypse Now all reached large audiences. Sure, they were outnumbered by celebratory depictions of war (invariably involving daring exploits against nefarious Nazis), but the point is they existed and competed with standard fare. Nowadays, in an era when PR has hugely extended its tentacles, if they ever got made in the first place they’d be shunted off to the art house sector and only seen by people who attend film festivals.

This affects TV as well. In the 1980s the BBC could produce the nuclear war docu-drama Threads and the basically seditious Monocled Mutineer. Whereas now we are treated to The SAS: Rogue Heroes. For assorted cranks and weirdoes, the former are available on DVD.

It might seem strange to say in the aftermath of the Corbyn and Sanders insurgencies but, as Theaters of War demonstrates, the long march of PR is making our societies more and more conservative and averse to change. If the Left cannot find a way to counteract this tendency and reach mass audiences, it – and maybe humanity as a whole – will not have a future.

 

 

 

 

 

 

 

 

 

 

 

 

 

Worthless but more powerful than ever – the non-death of Britain’s right-wing media

 

A couple of weeks ago the Financial Times reported that the Sun newspaper, bastion of working class conservatism for nigh on half a century, had been marked down by Rupert Murdoch as a “worthless asset”.

The tabloid, which in the ’90s claimed it alone could sway general elections, had been so denuded by falling sales, legal costs related to the phone hacking scandal, and damages paid to civil claimants, that it made a pre-tax loss of £201 million in 2019-20 and had “zero carrying value”. The management of Murdoch’s News UK expected it “would not return to positive growth”.

Those who lament the Sun’s baleful influence on this country’s political and ethical culture – from smearing dead football fans as hooligans, to hounding gay celebrities, to, with certain Blairite lapses (if lapses they can be called), cheerleading for Thatcher – might indulge in a fully justified bout of schadenfreude.

But if there is such a thing as ‘pyrrhic crowing’ this is it. For, despite its financial woes, the right-wing media is as strong as ever in Britain.

There was a brief period of optimism around the time of the 2017 General Election when it seemed like shoestring news sites like Evolve and the Canary, and even single person blogs (not this one) could go under the radar of the mainstream media and reach millions. But that window was abruptly slammed shut, as traditional media organisations upped their social media game (News UK claims the print version of the Sun and its website reach a total of 36.5 million people), and a Facebook algorithm change meant that alternative sources of news found their ‘shares’ drastically reduced. 

One little appreciated reason for the Conservative victory in 2019 – beyond Brexit and Corbyn’s sullied reputation that is – was the diminished influence of alternative media and the restored power of the mainstream press.

The huge decline in newspaper sales in Britain is not an illusion – they have dropped by two-thirds in 20 years according to one estimate  – but the influence of the press, and the mainstream media more generally, is felt far beyond the number of sales or subscriptions.

As shown by the Hancock surveillance (and the absence of any need to explain how it occurred), the Sun still has wields huge influence and, even if it is a financial dead weight, will not be permitted to go under.

Notwithstanding diminished sales, the right-wing press still commands a palpable physical presence and is basically assured that its leading stories will be amplified by broadcasters or least relayed through regular paper reviews.

In Bad News for Labour: Antisemitism, the Party and Public Belief (the first chapter of which is an eye-opening account of how an invented narrative pushed by the right-wing and liberal media can become firmly lodged in the public mind), one participant who doesn’t read newspapers explains how he came to his belief that 20% of Labour members had been accused of antisemitism:

Headlines I see. I work in Tesco’s. As I walk into the shopping mall I read the headlines every day …. Most of my perception was based on – as I say I don’t read newspapers – my perception was based on the number of headlines and how long it was in the papers. [participant 4 nods in agreement]

And in an era of all-pervasive social media reach, and permanent smartphone connection to the Internet on the part of most of the population, the reach of the press – quite apart from actual newspaper sales – is greater than ever. Web portals, search engines, Facebook and Twitter will all place the output of the mainstream media in front of users so even if you consciously don’t read a newspaper, you will find it hard to avoid knowing what they are saying.

This is reminiscent of Noam Chomsky’s and Edward Herman’s concept of “big news” in 1988’s Manufacturing Consent, except that these “sustained news campaigns” are even more potent than they were three decades ago.

We are reaching a state where news and advertising are converging. This is not necessarily because news is becoming the slave of advertising, though that does occur, but because news is taking on the qualities of advertising. Advertising works through endless repetition so that even if it is incredibly annoying (or perhaps because it is) the brand name becomes ingrained in the observer’s brain and they may choose it if they ever buy that product.

News now – amplified through multiple platforms – works on the same principle. Deliberate censorship is unnecessary because in our information-saturated society unwelcome news can be guaranteed to reach only a small minority if it does not receive the blessing of escalation by powerful interests.

There are many important and validated news stories – for example, the purging of Labour party members by Keir Starmer, falling life expectancy, or the ongoing atrocity of the UK ‘welfare state’ – that fail to make even a ripple on public consciousness because they are not amplified.

In a compulsively busy society such as this one, the attention of most consumers of news is necessarily slight with most relying on snatches of news to form a picture of what is going in on the world. There is, as others have said, “a crying need” for the Left to invest in its own media because a social media presence, however strong, cannot compete with a uniformly hostile mainstream media. But even if new investments are made and TV stations created, the gatekeepers will still do their utmost to ensure the vast majority remain unblissfully unaware.

Some American myths in the month of November

So the American people will have four more years of “socialism”. However will they cope? Some aren’t taking it well at all, such as Donald Trump who came over all Benito Mussolini and called for a “March on Washington”. In the interest of historical accuracy, it is only fair to point out that Benito Mussolini was actually invited to march on Rome in 1922 and bring to power the world’s first Fascist government.

Do you feel, consciously or not, a sense of relief that Obama won? Do you suffer from guilt about feeling relieved? Have I just hit upon a new psychological state – relief guilt? Given the absurdly constricted nature of the choice, you can debate endlessly whether it was right to vote for Obama or shun the whole corporate charade. Some, like Noam Chomsky, have confronted that dilemma.

But, from an international perspective, I don’t think voting or not voting is the main problem. It’s fundamentally irrelevant. The enduring problem is that the American Presidential election campaign puts out so many myths that possess a stickiness that attaches them to the cultural landscape. Before you know it, the elusive reality bird that you worked so hard to track down has flown away.

So here are three myths that urgently need dispelling.

Myth 1

Laissez-faire bad/Government intervention good

Obama spent $14 billion bailing out General Motors. Romney would have let the company go bankrupt. Whether the latter is actually true is highly questionable given that George W started the enormous bail out of corporate America. But the General Motors’ bail-out was presented as a victory against the ideological denseness of pure laissez-faire and for the United Auto Workers Union.

But it was a strange kind of victory. Post bail-out, the UAW signed a deal with General Motors in which, aside from its existing members getting a below the cost of living pay “increase”, also ensured that new car workers would be hired at half the pay rate, $16 a hour, that their predecessors received. This result of government intervention is not good. It’s not loitering on the outskirts of good. It’s very bad.

The General Motors bail-out exemplified 21^st century government intervention in which corporations are saved from their own mistakes through gifts of taxpayer money, while their workers and customers get the discipline of free markets. And this happens while the tax burden continues to be shifted away from corporations and the rich and onto the shoulders of the majority.

Anti-austerity but pro-capitalist economist Ha-Joon Chang has shown how General Motors’ failure was preceded by dabbling in every conceivable corporate fad over the last 30 years – shareholder value, buying other car firms and creating a highly profitable finance arm. But when it came to the state saving the company from bankruptcy, “the US government”, says Chang, “deliberately took shares that do not have voting rights (albeit priority in dividend payouts) – so that it would not have any say in the management of the company.”

Chang has noted the same reticent government intervention in Britain, where the government has legally nationalised two large banks, but does not control them."This is not even capitalism anymore," he says. “What is the point of owning a bank, when you have to negotiate hard, or (one suspects) even beg, in order to set the pay of your employees or make it lend more in the way you want?”

The original bail-out of the banks was, in scale and expense, the supreme example of “not laissez-faire” dwarfing all others. But was it a good thing? It saved the economy from collapsing at the time and saved the banks at massive taxpayer expense, transferring a large proportion of their debt to the public. This was followed by a huge infusion of quantitative easing which they used to recapitalise themselves. But they are still indebted. Bank of England Governor, Mervyn King said recently that advanced economies won’t be able to escape “their current predicament” without more write-downs of debt by banks and more recapitalisation. So what began in 2008 is not over.

Just possibly, in 2008, the banks should have received a classic dose of laissez-faire and been allowed to go bust along with their debts. Then new public, debt-free, banks could have been created, as suggested by, among others, Joseph Stiglitz. The “pain” would have been more intense in the short-term but not prolonged.

But our governments “intervened” the make sure this didn’t happen and we are living with the consequences.

Thomas Frank quotes a line from the 1930s American socialist, Norman Thomas, in his book, Pity the Billionaire. “There is no Socialism at all about taking over all the banks which fell in Uncle Sam’s lap, putting them back on their feet again, and turning them back to the bankers to see if they can bring them once more to ruin.” But there’s quite a lot of capitalism about it.

Myth 2

The middle class is the bedrock of a strong economy, democracy etc

Obama clothed his campaign in the need for a “strong middle class”. Romney vowed to “protect the middle class”. But like the fabled word “community”, the larger the middle class looms in political rhetoric, the more it disappears in reality.

According to US census research, published in September, the gap between rich and poor has widened to its highest level since 1967.  “The gains from economic growth in 2011 were quite unevenly shared as household income fell in the middle and rose at the top,” said Robert Greenstein, President of the Center on Budget and Policy Priorities, about the data. Average incomes fell for the bottom 80% of earners and rose for the top 20%. The top 1% of households experienced a 6% rise in income.

The income of the median American family is lower than it was in 1998. In a 2011 article about the disappearing American middle class, the US journalist Paul Harris said, “I do not care if you are a Tea Party activist or a Socialist party USA organiser, you should be able to agree on one thing, at least: this is unsustainable. Something has to give. But no one in the current political system looks like they have an answer.”

In Britain, as Ed Miliband’s rhetoric about the “squeezed middle” shows, the political class are having to come to terms with the new reality but are equally clueless about what to do about it. In Britain, on current trends, the entire bottom 50% will be poorer by 2020. The Trades Union Congress in the Britain thinks companies should be encouraged to raise the average wage. Well, that could work. In another galaxy.

As far as the vanishing middle class in the US is concerned, it’s plus ca change, no matter who lives in the White House.

Myth 3

“Equal Pay” is more achievable under Obama than Romney

Ok, so maybe this myth is a bit of a cheat, but language speaks volumes, if you’ll pardon the tautology. To keep referring to “equal pay” in the context of contemporary America and Britain is akin to waxing lyrical about “human rights” in a Roman coliseum at lion time. Pay in both countries is staggeringly unequal and getting worse. And neither Obama, nor Romney, had he been elected, will do anything about it. Obama clearly didn’t in his first four years, as the above census data shows. This is not meant to justify any kind of gender pay discrimination or retarded Republican views on abortion or contraception, but the “equal pay” mantra gives the impression of railing against privilege when, in reality, it does nothing of the kind.

In order to even begin addressing pay inequality the debate needs to move on from just talking taking about discrimination to understanding and, acting upon, exploitation: the remuneration workers get in compensation for their contribution to profit, the two elements of which are wildly out of sync. This, in turn, needs to expand to look at who decides pay levels, and thus the economic autocracy we live under will come gradually into focus. This is a mammoth intellectual shift which, as the Presidential election campaign showed, the political mainstream is incapable of making.

As the American writer Walter Benn Michaels has said, the ostensible Left in the US is little more than the “human resources department of the right". It is, despite what Donald Trump believes, not dangerous to the status quo.

The Czech dissident and later head of state, Václav Havel, developed the concept of “living in truth” as a means of defying the Communist regime in Czechoslovakia. It entailed, in part, a refusal to accept the lies of official propaganda. It is becoming a principle that is applicable to living in western, “democratic” countries. Whether one votes or not.

The Great Repetition? Karl Polanyi and today

“Some books refuse to go away” it says in the introduction to the 2001 edition of The Great Transformation by the Hungarian economist Karl Polanyi.

Painstaking research sponsored by Google reveals that those words were written by a historian called Charles P Kindleberger, who with a name like that has to be American, in 1974.

If in 1974, The Great Transformation was obstinately sticking around, by now it is snaking out of book shelves across the world, screaming “Read me!”

Written as the Second World War was raging, The Great Transformation:  the Political and Economic Origins of Our Time, to give its full title, is a book that becomes more prescient the older it gets.

The book is about another age that is frighteningly reminiscent of our own. Its subject is the creation, in the nineteenth century, of what we would call now free market capitalism, molded and justified by the ideology of economic liberalism. It shows how that free market, liberal civilisation reigned supreme for a while but then imploded in the 1930s, as Fascism took over.

In keeping with the best Hollywood tradition, the plot of the sequel is uncannily similar to the original.

Then there was economic liberalism, now there is neoliberalism. Then, Fascism and Stalinism were in the ascendancy, now there is a fear that totalitarianism will return as neoliberalism flails ineffectually, unable to deal with the consequences of the society it has created.

Polanyi says the only humane alternative to the utopian fantasies of economic liberalism and the nightmares of totalitarianism, is socialism. He defines socialism as the conscious subordination of the free market to the demands of democratic society.

As such, The Great Transformation has provided inspiration to those who want to re-regulate capitalism. Maurice Glasman, the English political thinker behind Blue Labour is a “Polanyian”. The preface to the latest edition is by Joseph Stiglitz, the American Keynesian economist, who believes that government intervention will make capitalism stable and just.

But The Great Transformation can be interpreted in more than one way. It has also influenced more radical thinkers like the libertarian socialists Murray Bookchin and Noam Chomsky, who see in the book an appreciation that for almost all of human history, capitalism was rejected as a way to run society. And why should the future not draw on the wisdom of the past?

What The Great Transformation does is to destroy the notion that capitalism is a natural way to be, that a market economy automatically emerges when the restraints are taken away and people’s innate competitiveness is allowed to surface unimpeded. On the contrary, free markets are conscious creations, dependent on the destruction of older, more stable forms of society. Human nature, according to the evidence that exists, is not naturally competitive about the means of life.

Capitalism is an artificial economic system, in exactly the same way Communism was. And what has been created, can be uncreated.

Polanyi looks in detail at the first society that experienced this “great transformation” – England during the Industrial Revolution. He was able to study this history first hand because he fled to England from Vienna in the 1930s.

A market economy was pitilessly created by systematically annihilating the old society. Peasants were forced off the land and into the ‘dark, satanic mills” by government enforced enclosure of the open common lands on which their livelihood depended. Craft guilds, which set wages and established the quality of products, were abolished. A labour market was created by repealing laws which restricted workers’ mobility, obliged employers to provide seven-year apprenticeships, and enforced annual wage assessments by public officials.

In this blog, it has been asserted that the market economy is a myth, that the economy is not the scene of an entrepreneurial, Dragons’ Den-style, battle of the fittest among individuals, but a place where large corporations, controlled by tiny elites, seamlessly work for their own advantage.

But in the eighteenth and early nineteenth centuries, the market economy was not a myth. There was a transformation from an ordered, hierarchical and static society to an immensely fluid society in which new inventions could change the fortunes of people and the society around them. Industrialists often came from ordinary backgrounds, although they were soon swallowed painlessly into the British aristocracy. Corporations did not come into being until the 1850s.

This market economy did two things that are often not contemplated together. One was to create the dependency of millions of people on the fortunes of an economic system. In pre-capitalist societies, people were not threatened by society with starvation unless they made enough money. They were economically secure, although not rich. This changed with the creation of a market economy. People’s livelihoods and, often lives, were dependent on the kind of employment they could find. In Marxist terms, masses of people were turned into proletarians, surviving by selling their labour. The Left in the nineteenth century called it “wage slavery”.

The second was to create “unheard of material welfare.” For the first time in history, production based on machines became dominant and people were compelled to work for it, on threat of starvation. This raised the possibility, if not the actuality, of material abundance for everyone. “At the heart of the Industrial Revolution of the eighteenth century there was an almost miraculous improvement in the tools of production,” says Polanyi “which was accompanied by a catastrophic dislocation of the lives of the common people.”

This feature of capitalist societies, economic insecurity in the midst of material plenty, is an essential fact of life today. Most people are in an economically precarious situation – they are one or two payslips away from insolvency - but the economy produces an immense superfluity of goods.

The Great Transformation shows how the Industrial Revolution in England, which became the model for the rest of the world, was justified and shaped by the ideology of economic liberalism. Shaped because the idea of a laissez-faire economy, in which everything was a commodity and there was no outside intervention, became the unimpeachable principle of the age. England’s cotton industry, for example, initially got off the ground with the help of protective tariffs on imports, but later in the nineteenth century, free trade was supreme.

Economic liberalism sought validation in the past. It, finally, was liberating an elemental feature of human nature, which had been artificially held down by “civilisation” for thousands of years, the desire for individual gain. Adam Smith, who inspired free market philosophers, based his thought on man’s “propensity to barter, truck and exchange one thing for another”.

But this idea, though immensely powerful as a spur to action, was a gigantic error. “No society could, naturally live for any length of time unless it possessed an economy of some sort,” says Polanyi, “but previously to our time no economy has ever existed that, even in principle, was controlled by markets.”

Primitive societies lived through reciprocity. There was division of labour – different people performed specialised tasks – but not markets. A person coming back from a hunting or foraging expedition shared their spoils. Later, they would take as others gave. There was no motive of gain, or labouring for remuneration.

Later societies, even those horribly oppressive like the despotism of Egypt under the Pharoahs, were based on distribution in kind, rationing, not markets.

In Europe after the 15^th centuries, markets in towns were created, but they were deliberately prevented from trading with the surrounding countryside.

Past societies were not more altruistic or selfless, but non-economic purposes were paramount.

The historical falsity of economic liberalism means that its fabled concept of laissez-faire is also false. Laissez-faire has come to mean that if society is left alone by government, a market in which everyone competes and some people inevitably emerge victorious, will naturally come into being. Government regulation stops this natural competition happening. Much as laws against assault stop physical aggressiveness happening.

(Although notice the inverted logic, government stops market competition happening so it should get out of the way. Laws stop assaults happening, without them there would be mayhem, so they are necessary)

There is nothing natural about laissez-faire. What Polanyi shows is that laissez-faire can only happen once other ways of reproducing life, are destroyed. And then a laissez-faire, free market economy can come into being, rigorously policed by the state, so that it is not improperly interfered with. Economic liberals in Britain in the 1830s/1840s were fanatically opposed to extending the vote to the working class. And trade unions were illegal because they interfered with labour, now seen as another commodity, finding its price on the market. Neoliberals hate trade unions for exactly the same reason.

“For as long as that system [the market system] is not established, economic liberals must and will unhesitatingly call for the intervention of the state in order to establish it,” says Polanyi, “and once established, in order to maintain it.”

As the former New Labour health advisor, Paul Corrighan, put it in 2010, “The state has to actively create a market, they don’t appear of their own account.”

The experience of India under the British Empire illustrates what Polanyi is trying to get across. Millions of people died in famines in late 19^th and early 20^th centuries. The natural reasons for crop failures had not changed but the effect was far more devastating.

The explanation is that whereas in the old feudal arrangements of the past, there were stores of grain in case of famine, in the new market system, they were destroyed. Millions of people had to buy what they could on the market, where prices rocketed because of shortage.

“The three or four large famines that decimated India under British rule since the Rebellion were thus neither a consequence of the elements, nor of exploitation, but simply of the new market organisations of labour and land which broke up the old village without actually resolving its problems,” writes Polanyi. “While under the regime of feudalism and of the village community, noblesse oblige, clan solidarity, and regulation of the corn market checked famines, under the rules of the market the people could not be prevented from starving according to the rules of the game.”

So the great transformation was justified by piling fiction upon fiction. Humans weren’t naturally economically competitive, laissez-faire wasn’t just leaving things alone so that liberty could flourish, the power of the state didn’t diminish under the free market.

But balancing above all this was a still more fundamental fiction. Under a free market system, everything has to be a commodity and find its price on the market. Humans and nature were treated as commodities like everything else. But they aren’t commodities. They are, in Polanyi’s description, fictitious commodities.

A commodity is something – like a mobile phone – produced for sale. But human beings and the natural world are not produced for sale. They are not “produced” at all. But in the world of economic liberalism, they were assumed to be commodities, just in the same way that cotton was. Owners of land could do what they want with it. People had to get the means to live by selling their labour. If they can’t find a job or the economy goes into downturn, they can’t sell their labour commodity, and person irrevocably attached to that commodity, starves or is reduced to poverty.

Polanyi’s point, and one reason why he is extremely relevant today, is that people naturally rebel against being treated as commodities. “To expect that a community would remain indifferent to the scourge of unemployment, the shifting of industries and occupations and to the moral and psychological torture accompanying them, merely because the economic effects, in the long run, might be negligible, was to assume an absurdity,” he writes.

But as The Great Transformation shows, that rebellion can take different forms. It can be a civilised transition to what he calls socialism. But it can also entail scapegoating minorities, armed conflict and totalitarianism. In the 1930s, that rebellion meant the American New Deal but also Nazism and the Second World War.

Treating people as commodities, that periodically are not needed, has effects. What economic liberals said in the Great Depression was that if trade unions and the government stopped interfering, wages would naturally drop, in the long run, to allow profit to be made and the economy would eventually return to health. Theoretically, they have been right. But, in the long run, as John Maynard Keynes, said we’re all dead. What was said about Marxism by the Darwinist psychologist Edward Wilson, is now most descriptive of free market capitalism: “wonderful theory, wrong species”.

In part two, we will look at how economic liberalism gave way to totalitarianism in the 1930s. And what not treating human beings as commodities, really means.