Early on in the George H.W. Bush presidency, there was the collapse of the Soviet Union and the end of the Cold War; triumphalism was in the air: liberal democracy and capitalism had won. Writing in 1989 in the journal The National Interest, historian Francis Fukuyama penned an article “The End of History,” in which he famously wrote
“What we may be witnessing is not just the end of the Cold War, or the passing of a particular period of postwar history, but the end of history as such: that is, the end point of mankind’s ideological evolution and the universalization of Western liberal democracy as the final form of human government.”
The last opposition to laissez-faire capitalism had fallen. This was a triumph, hundreds of years and innumerable conflicts and conquests in the making, tracing back to the birth of capitalism itself, to the Medici bankers of Renaissance Florence and to the London Royal Exchange of the mid 16th century – the latecomer Amsterdam Stock Exchange only dates from 1602.
But rather than sharing the fruits of victory with the people that had made this triumph possible – from the soldiers who fought the wars to the little people who had prayed the Rosary night after night to combat godless communism – Big Capital dropped them like an old shoe. There would be no “peace dividend” for the masses.
But underlying all this was the fact that the nature of Capitalism in America was itself changing, shifting from Industrial Capitalism to Financial Capitalism. Industrial Capitalism is classical capitalism as characterized by the private ownership of the means of production – thus factories, shipyards, transportation, stores, etc. Here is a definition of Financial Capitalism from Wikipedia: “Profit becomes more derived from ownership of an asset, credit, rents and earning interest, rather than productive processes.”
All this would be part of a dramatic shift in American life – the bulk of the population would no longer be important to wealth of the nation. JFK famously exhorted Americans to “ask what you can do for your country.” Well, right now, the answer has to be “not very much” and that’s a problem. Indeed, with the end of the Cold War, Big Industry quickly moved production to lower wage areas, areas with sharply lower environmental and worker protection standards – leaving labor unions without members. The family farm was a thing of the past and agribusiness was firmly in the hands of giant companies like Archer-Daniels-Midland, Tyson, Cargill, Monsanto, etal; rather than the yeoman farmer, agribusiness would largely employ immigrants (documented and undocumented ) for field work and also to staff the packing plants, slaughter houses and other downstream processing points.
The gig economy was launched. Employment became “precarious.” Corporations and the wealthy paid less and less in taxes, off-shore tax havens multiplied, profits were housed overseas to avoid American taxes (Apple is particularly adept at this). Companies were more multi-national, less and less tied to a given nation.
Indeed, the abandonment of the masses quickly turned sadistic: climate change denial, air pollution, water pollution, mountain top removal, reduced sperm count, damaged ova, environmental destruction, absence of recourse when wronged by a corporation, rape of federal lands, crumbling infrastructure, diminishing access to proper health care, increasing expense of higher education and ruinous student loans, failure to deal with the opioid crisis, , growing homelessness, increased incarceration to the point that the US has risen to first in the world in the rate of imprisonment of its citizens, bypassing even that of Apartheid South Africa, and on and on. In particular, the white working class both urban and rural was more and more marginalized to the point where in recent years many saw a savior in the coming of Donald Trump. And this overt aggression against the people has not abated: the death-dealing water crisis in Flint Michigan; the tragic breakdown of the power grid in Texas; the deadly collapse of the 8 lane I-35 bridge in Minneapolis, a bridge no less over the nation’s pride, the Mississippi River, The Father of Waters. And then there have been the failure to address mass shootings and the response to the Covid-19 crisis – half a million deaths, and counting.
One thing that made this break with the people all the easier for Financial Capitalism was that masses of young men were no longer needed to fight the nation’s wars. Indeed, resistance to the draft and to the Vietnam War itself showed that the conscript citizen army was no longer a go-to solution. Instead, a professional standing army was developed attracting young people with promises of life long health care, job training and life-skills, offering a creditable alternative to unemployment and dead end jobs for many. For immigrants, the ploy was even bolder – the path to citizenship. This new high tech force required more sophisticated operatives and the number of women who were taken grew accordingly – already they were 6.8% of US forces in the First Gulf War; today the numbers are much more impressive: according to the Defense Department, women now make up 20 percent of the Air Force, 19 percent of the Navy, 15 percent of the Army and almost 9 percent of the Marine Corps. This new force has since been complemented by unmanned drones, by mercenaries (e.g. Blackwater) and houseboys from private firms employed to spare the troops from tasks like kitchen duty, the KP of old. The Commander-in-Chief thus has his own private army. Add to that how the Congress has the responsibility for managing the nation’s wars and this whole thing looks unconstitutional (Article 1, Section 8).
And the professional military has become the incubator of domestic terrorism. Randy Weaver (Ruby Ridge) and Timothy McVey (Oklahoma City) are early examples of military veterans turned terrorist and the pattern has continued – the US press is startled how so many members of domestic terrorist pro-Trump organizations like the Oath Keepers and others of the mob that attacked the Capitol on Jan. 6 are ex-military.
The example of a petro-state where a country’s resources are exploited to benefit a small elite can be instructive. Consider how a petro-state operates: the ruling elite enrich themselves by making deals with international companies (who even bring in their own labor force); the military are a necessary expense but, to maintain their lifestyle, the elite really do not need to invest in the nation’s infrastructure, education, training, industrial plant, … .
Something analogous is happening here in the US. The gap between the top economic 1% and the general population has become a chasm. The elite do not send their children to public schools; they do not endure the humiliations of the TSA when travelling by air – they use private jets that fly from small airports where TSA does not operate; they have Cadillac medical plans and access to top specialists in private hospitals; and on and on. [Hmm, an elite walled off as the hoi polloi watch the world fall apart – reminiscent of Jared Diamond’s study Collapse.] Indeed, investment in infrastructure, the environment, education, worker training – all continue to stagnate; the health care situation in the US is an absolute disgrace (e.g. the highest rate of infant mortality in the industrialized world) – and ignominiously for a capitalist society, it gives the lowest return per dollar spent on health care. And then there is student debt, the result of a flagrant refusal to invest in the nation’s young people. (This wasn’t always the case; schools in the state university systems used to be tuition free and the idea was in the air to help all students graduating high school: the 1956 National High School debate topic was “Resolved: That governmental subsidies should be granted according to need to high school graduates who qualify for additional training.”)
The failure to invest in the nation and its citizenry makes little sense – a well run company will pay dividends but also use its profits for new plant, for R&D, for worker training; nothing like that is true of the way the US treats its citizenry today. All justified by decrying “socialism” and making an appeal to “American Exceptionalism” – really a sucker punch. It doesn’t have to be like this in a Capitalist society: in contrast, look at France where universal health care kicks in at pregnancy, where education from pre-school to university is free and where worker continuing education is the law (“la loi du 16 juillet 1971”). And the French live better and longer than Americans. In fact, Canada and all the countries of Western Europe have better outcomes than the US which ranks 46th world wide in life expectancy, just after Cuba and just before Panama. For details, click HERE .
The Austrian-American economist Joseph Schumpeter’s concept of “creative destruction” has become a catch-phrase of the TV pundits – capitalism will automatically replace old industries and practices with newer more efficient and more profitable ones – thus Sears by Amazon. But, as Schumpeter himself pointed out, such destruction can also apply to the very institutions that enable capitalism to function so well in the first place. And that is happening to American democracy. The respected, pro-capitalist British weekly The Economist has a research group which analyzes the state of democracy in countries around the world. Ominously, the US now longer rates as a full democracy according to their Democracy Index; rather it is classified as a “flawed democracy” and is ranked only 25th among democratic nations. (In contrast, Canada, Ireland, New Zealand and the countries of Scandanavia score well.) For details, click HERE
But the process of denying the bulk of the American population the benefits of Capitalism has been made even simpler. Financial Capitalism is by definition a greedy business and in the last decade of the American Century it strengthened its hand with the emergence of all sorts of clever financial shenanigans and deregulation of the banking industry. All this further marginalized the bulk of the American population; all this also led to the Casino Capitalism we find we have today, the Casino Capitalism that led straight to the crash of 2008 where the big banks and corporations were bailed out with taxpayer money – after all, they were “too big to fail.”
Only in a nation divided against itself could the people fail to make common cause in such a dire situation. But that is the beauty of it: by the end of the Reagan presidency, the country was indeed so splintered along lines of class, race, ethnicity, religion, region, politics and ideology that a collective effort was no longer possible. It has only gotten worse since. This is not the “End of History” as Fukuyama saw it, but rather the “End of Democracy in America.”