The Crisis of Liberal Democracy and the Corporate Statist Complex

Democracy is in crisis. Or, or more significantly, liberal democracy is in crisis. So writes Philip Coggan recently in The Economist, the Western world’s foremost punditocratic commentary on the shifting social, cultural, and political terrain that goes by the slippery name of “globalization”.

Coggan calls our attention to the growing, worldwide disaffection between voters and their governments, suggesting that the planetary financial crisis of the last decade shattered an implicit social compact that had quietly been in place since the conclusion of the Cold War. In exchange for the promise of broad-based economic growth and the improvement of everyone’s material lives, the constituents of “democratic reform” – the watchword of liberalization advocates for decades – were willing to surrender a certain measure of their political and financial autonomy to the engineers of the new corporate state, which now took on truly international dimensions.

However, when the compact collapsed in 2008, it was only the people who suffered. The corporate state was left holding all the remaining marbles. The corporate state itself was kept intact, and even in some circumstances flourished, through various and sundry policies , fiscal as well as monetary, with the familiar Keynesian justification that “pump-priming” the system – i.e., reloading the coffers for already existing wealth-holders – would mean the eventual lightening of economic burdens for the average, working schmuck.

The promise, of course, was never realized. Expecting the burgeoning corporate state to look after the welfare of the democratic social compact-makers themselves was like expecting the proverbial fox to guard the henhouse.

“Trickle down” economics has been the name of the game since the 1930s, whether it wears the mask of the political right or the political left. The right created Eisenhower’s storied “military-industrial complex” in the Fifties. The left grew its own government-industrial version starting in the mid-1960s. Fiscal “stimulus”, whether it be aimed chiefly at producing guns or butter, has merely offered the faithful in modern liberal democracies the dour, Hobson’s choice between supercilious government, or greedy corporate, bureaucracies to serve as their exploiter of choice. The public and “private” sectors became increasingly intertwined, if not indistinguishable, as the not-so-distant AIG scandal showed. The term “crony capitalism”, which came into common use in the 1990s to refer to the cozy, filial relationship in Asian economies between large corporations and the government policy-making apparatus, became a standard operating principle for American politics after the election of 2000, and continues even more strongly today.

In order to “forestall” economic collapse, central banks flooded liquidity into the banking system, which simply sent the stock market and other fixed investments soaring to new heights, creating more so-called speculative “bubbles” while benefitting mainly the equity-holders who had already been bailed out by the fiscal stimulus.

The curious conjunction of soaring structural unemployment, or underemployment, at same time the global economy “recovers” from past recession has been overlooked amid rising “populist” rhetoric. Such rhetoric, however, often dribbles from the lips of the custodians of the government-industrial complex itself. And, like the familiar racist rhetoric in the Old South aimed at dividing the loyalties of the disenfranchised whenever the time for voting came around, it is designed quite artfully to bury the question of who the fabled “one percent” baptized by the Occupy Movement truly are.

As New York Times columnist Ross Douhat acidly notes in his recent essay ”The Contradictions oft Liberal Populism, the people who both elected and funded the landmark election of the city’s new “progressive” mayor Bill de Blasio were by and large the very same ones who control most of Gotham’s wealth, and who therefore probably expect him to dance to their fiddles, not to the cries of the surging underclass. Douhat quotes New York Magazine writer Benjamin Wallace Wells ironic statement that “in De Blasio’s election the shape of class warfare shifted, as New York’s liberal Establishment looked into the face of the disenfranchised and saw, for perhaps the first time, its own image.”

As noted philosopher Slavoj Žižek presciently observed during an interview in 2007, all the enthusiasm around the world for liberal democracy that had been building prior to the global financial collapse the following year was quietly resulting in “the unheard-of strengthening of state apparatuses.” Žižek argued, in effect, that the pseudo-revolutionary left would be caught off guard by what was coming because it was spouting weather-worn slogans while insisting on “direct action” without any coherent or meaningful theory of what might be happening at a global level. “Today, more than ever,” Žižek opined, “we need time to think. This doesn’t mean that we don’t protest or do what’s possible. But let’s not behave as if everything is clear.”

Seven years later Žižek ‘s caution is even more well-taken. The left’s current, and almost predictable, disillusionment with the Obama administration after five long years shows that deeper and more honest thinking is indeed required. We are at the end of the Yellow Brick Road, so far as global capitalism goes, and we still think the “wonderful wizard” of state intervention will save us.

“Everything profound loves masks,” Nietzsche once wrote. And we have to start peeling off all the masks if we are to start thinking about the present crisis of liberal democracy. First, we have to realize that behind the mask of conventional progressive thought – as it is behind the mask of so-called “free market” ideology – lies the “pale monster” Nietzsche’s Zarathustra recognized as the ravenous corporate state. Even more so, we need to remove the mask of our own ideological self-interestedness before we eventually come to terms with the fact that there is an historical – even a divine – force that we have refused to acknowledge.

Carl Raschke is Professor of Religious Studies at the University of Denver. He is the author of numerous books and a regular contributor to Political Theology Today.