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writing for godot

The Stealth Revolution: Constitutional Change by Indirection The Future of the American Plutocracy

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Written by Winston P. Nagan   
Monday, 27 February 2017 08:01

By Winston P. Nagan

Professor Emeritus of Law, University of Florida Levin College of Law

Recently, the Principal Advisor to President Trump, Steve Bannon, told a reactionary audience that the prime objective in terms of policy-making for this administration was the complete demolition of the so-called ‘administrative state.’ The implications of this directive are quite far reaching because the substantial removal of the administrative architecture of the social democratic constitutional state will effectually result in the collapse of the constitution itself. Let us put this in historical perspective. At the turn of the last century President Teddy Roosevelt began to see the threat posed to the Federal Union and American democracy by the emergence of oligarchic business trends. He saw the threat to our constitution and its democratic principles as coming from the emergence of large scale corporate monopolies. If this were to be unchallenged, the Constitution would come under the influence and political control of an unelected plutocracy. In his time, he saw plutocracy as the greatest threat to American values.

In 1929 we had the Great Depression. Plutocratic interest was able to cement itself via the Supreme Court ruling in Lochner v. New York[1], which made private property a fundamental and nearly unchallenged constitutional right. The unregulated free market economy, protected by the elevation of private property to near absolute status, resulted in forms of egregious speculation, which resulted in capitalism consuming itself.

When Franklin Delano Roosevelt was elected in the early 1930s, he acknowledged that the unregulated aspect of the market was in fact not the product of metaphysical forces but the product of practical human choices. If choice could make the mess, then choice could unmake the mess. Roosevelt faced incredible resistance to any form of regulatory measures to salvage capitalism from itself.

However, the Lochner case and the Supreme Court succeeded in overturning over 200 efforts at regulating various aspects of the economy. The result was that the plutocratic elite had learned nothing from capitalistic cannibalism and were now going to destroy the emerging New Deal state which sought to save capitalism from itself.

When the composition of the Supreme Court changed, important New Deal initiatives emerged to stabilize and improve the American economy. These developments received enormous support as a consequence of World War II. The necessity of national security compelled the plutocrats and the government to work through a collaborative economic partnership, which benefitted capital, labor, government and the American people. The problem Teddy Roosevelt faced about oligarchic tendencies was moderated by the army of lawyers generated in Ivy League schools who were trained to challenge the scope and reach of antitrust law. These and other factors permitted a slower but important accretion of economic monopoly.

The University of Chicago and its economic department promoted a revived theory of a non-regulatory economic system. Milton Freidman argued that the Great Depression was not a flawed free market but a flawed system of governmental liquidity. From these developments there emerged a new normal for political economy, loosely styled ‘neoliberalism.’ According to neoliberals, the Stalinist state, which extinguished private property, was an almost complete extinction of human freedom. The regulatory initiatives of the social democratic state was a creeping form of state control and a creeping form of the denial of human freedom. Fundamental to neoliberalism, was the idea that any aspect of value which could be privatized should be privatized, and, in privatized form, such value should be protected from governmental interference by the emergence of an absolutist jurisprudential protection of private property.

The weakening of financial regulation led to a massive collapse of the financial underpinnings of the world economy. Deregulation seemed not to learn much from 1929.

The evidence of the impact of neoliberal unregulated economic policy in the US and globally represents an astonishing crisis of global and national unemployment and a significant accentuation of radical inequality. Notwithstanding, Trump has already made it an objective to repeal vital regulatory standards for the financial markets. In short, the prospect of accentuated unemployment and inequality from an unregulated state looms large in the future of the world community. What is important to note here is that, at the intellectual level, the law and economics movement has made it an explicit objective to destroy the New Deal state. They’ve done this by the ferocious attacks on all forms of state regulation in virtually every sphere of life. Additionally, they vigorously assert the idea that a regulatory state can rarely include rational regulation and, as a consequence, it is a destroyer of freedom. In the meanwhile, the evidence of the non-regulatory state accentuates radical inequality and extended unemployment. The current challenge for Trump is whether he can deliver a better form of health care which is left purely to the market and which excludes as much regulation as possible. American people see this as Trump searching for a black cat in a dark hole that isn’t there. At the same time, the real agenda has now been made explicit: the elimination of the administrative state is the elimination of the architecture of constitutional social democracy. The elimination of constitutional social democracy will leave the American people in a legal and political void. In this void, it is the plutocrats who will rule without restraints of the rule of law. In short, the approach of President Trump seems to be in the direction of government of the plutocracy, for the plutocracy, by the plutocracy.

Simultaneously, we have the looming Russian scandal. In Russia, we have a form of governance by, of and for the oligarchy. In this context, there are no real Russian state interests, there are the interests of the oligarchy represented by the chief oligarch, Putin. In the US, the struggle to destroy the administrative state challenged basic values that are irrelevant to the plutocracy. It seems that in the future, if Trump succeeds, there will be no foreign policy representing state interests and values, there will be plutocratic and oligarchical interests done with a handshake and a wink. In this sense, the only conflicts between Russia and the US are the plutocratic and oligarchic interests and not the broader framework of values of the social democratic constitution and the UN Charter. If Trump wins in destroying the social democratic state, we must be prepared for governance that sidelines ethics and morality and we will join the Russian oligarchs in representing a form of international influence also devoid of ethics or morality. This would imply a farewell to the most fundamental values of governance and accountability. Indeed, the demise of the Bill of Rights and human rights in general.

 

 


[1] Kens, Paul. Lochner v. New York: Economic Regulation on Trial. University Press of Kansas, 1998.

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