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Economic Democracy – Part One – “It is Our Job”

July 9, 2010

In his 1976 campaign for the presidency of the United States, Fred Harris raised some fundamental principles about Economic Democracy. They included economic and political fairness, distrust of privilege and resistance to consolidation of political or economic power.

Yet, not only in America but throughout the world, the situation has gotten worse and Fred’s dream of a fair and just society has faded even farther from view than it was then. Economic and political power has become more consolidated and the distribution of wealth and income less fair. As Economic Democracy recedes further from sight, the citadel of Political Democracy becomes at  greater risk than it has been since WWII. Today much of the world is in the throes of a great economic crisis the solution to which holds significant peril to the survival of liberal political democracy and threatens the world with a return of the dark clouds of economic tyranny.

“The basic issue… is privilege–whether government will begin to look after the interests of  the average family, or whether it will continue to protect the interests of the super-rich and the giant corporations. What we’re up to is based on we assumptions: one, that people are smart enough to govern themselves,    and       two, that a widespread diffusion of economic and political power ought to be the expresses goal go government.”—Fred Harris, 1976 Campaign Handbook -The Basic Issue.”

“A fair distribution of wealth and income and power ought to be an explicit goal of government.–Fred Harris, 1976 Campaign Handbook- A Commitment to Fair Distribution.”

“Jefferson warned that with economic democracy there can be no political democracy.”–Fred Harris, 1976 Campaign Handbook- Economic Democracy.”

Make no mistake about it, what is happening in Greece today is a harbinger for the future of  liberal democracy the world over. While the doctors, nurses, public safety officers, maintenance and other workers in Greece are being asked to bear 100 percent of the sacrifices required by the current economic crises, the handmaidens of that crisis, the bankers, lawyers, advisors and lobbyists are not being asked to return either their profits or their bonuses to help stem the the flood of red ink so gleefully encouraged by them and upon which they so happily engorged themselves.

No, the ordinary Greek is being asked to shoulder the burden alone. From what I have seen of some of the media commentators, those same ordinary Greeks now appear to be being blamed for the fiasco. No wonder they have decided to riot.

Think about it, while the ordinary Greek citizen is being requested to lower his standard of living, no person or company handling the newest bailout transaction has been asked, nor have they offered, to forgo their commissions.

No, those same people that ushered in the crises and profited from it will now profit from it again by assuring that additional income and wealth taken from the average Greek citizen is transferred into their pockets and with that transfer go the peoples political rights as well.

Many commentators in the Blog-o-sphere have seen and understood the real threat to democracy that is being raised by this economic crisis and the proposals to end it. But little has been suggested to stem this rising tide of tyranny.

Fred Harris addressing this in his 1976 Campaign Handbook opined:

“If we did have an express goal for fair sharing in privileges and responsibilities, we would demand that the government stop redistributing wealth power and income in the wrong direction.

As it is, there is no regular publication of distribution indicators, and neither the executive or the legislative  branch of the federal government makes any attempt to discover the effect of distribution of its programs or policies.”

We need to recognize that, when this present crisis is resolved, and resolved it will be by the traditional means now being applied in the EU  (and suggested by some for the US) of reducing public debt by terminating or diminishing the educational, and social programs upon which a good society is founded and replacing that debt with another helping of debt in order to pay those who now hold the existing debt that created the crisis, usually the same people urging the new debt, we will see liberal democracy plunge down the dolorous path this same system proscribed for the third world for the past half century or more.

Does anyone really think that when the so called “Economy” rebounds those programs will be restored, or the middle class jobs that raised the citizen from economic tyranny these last 80 years will come back?

The only fair and sound solution is a strong dose of economic progressive medicine. Taxes need to  become more progressive not less. The obscene profits garnered by the few  these last few years should be viewed not as an investment but as a loan from the rest of us to those few to invest in the economy mostly for their own benefit and now need to be paid back, just as they are asking us to pay them back for the debts they have incurred ostensibly on our behalf.

This could be done by making the tax system more progressive, by raising taxes on the wealthy, eliminating all those credits, exemptions and loopholes in the tax system that benefit only corporations and the rich and  by eliminating privatization of governmental services all together. If something can be done better by private enterprise than let them do it, provided no public funds are used. Community funds should only be used to pay the workers performing the public service (e.g. Teachers, public safety employees, health workers etc.), or as direct distribution to individuals to purchase necessary goods and services. These three actions alone will eliminate the much feared deficit while restoring economic health to the nation.

So why are these solutions not being tried or even contemplated? Because, the problem has been that standard economic analysis, both on the right and on the left, has been wrong since the enlightenment.

There is nothing innately wrong with being rich, successful and to accumulate wealth.  Attempts to eliminate it  are doomed to failure. Communism failed not just because it was bad economics but because it was also bad sociology.

On the other hand the naive belief that there is something out there, market forces, the invisible hand, enlightened self-interest that regulates the accumulation of wealth is not only bad economics,it is also bad sociology and bad psychology.

For example, there is nothing inherently wrong with someone wanting to become a military leader, say a general. To believe however, that by abolishing generals you abolish wars is foolish (Communism). On the other hand to believe that there is something “out there” that will keep generals in check, like if we had enough generals and they competed with one another public welfare will be enhanced  (traditional Capitalism), is absurd. (Yet interestingly enough, throughout much of human history that is exactly what we did believe about controlling generals).

It was not until a few societies (such as the US in its Constitution) realized that that was not sensible and subjected the military to popular civilian control that we could really consider the possibility of peace (Political Democracy).

Unfortunately,  the failure to create a structure for Economic Democracy to accompany that that the founders of our Republic created for Political Democracy has allowed the wealthy to ally itself with the putative generals to corrupt the political process.

Wealth and the institutions that promote it are often corrupting even if the individuals are not. Just like wars and the institutions that promote it are fundamentally corrupting even if the individual generals and the soldiers are not.

Remember the military industrial complex is not in business to protect America. if America needs to go to war to protect or enhance those profits then the military industrial complex will use their economic and political power to assure that end. Similarly, it is not the business of the banks or the financial institutions to protect the health of the American economy, it is to make a profit.  If the health of the American economy must be destroyed in order to protect or enhance their profits, then they the banks or other financial institutions also will use their economic and political power to bring that about. It would be idiotic of them not to.

Yet the defense of the country and the health of our economy are fundamental to our liberty and our freedom. So, why would any rational person or any rational society give unfettered control over our most fundamental freedoms to something or someone who does not have the same interests as we do?

Remember also, once they are too large to fail, they, despite the Supreme Court, are not Americans. Our success is not necessarily theirs. Their very size make them citizens of no country. They may be foreign or even illegal aliens, but once they file for recognition in a state with the least protection from their activity, they are free to work their will nation-wide.

Imagine if our immigration system were run that way. If states rights were applied to citizenship such as they are applied to corporations, than a person can become a citizen of the United States by complying with the least strict state’s rules. Yet that is precisely what we have now for large foreign and domestic corporations.

Fred Harris suggested a response to this last issue in his Campaign Handbook

“We should require interstate corporations to be federally chartered. One state can now charter a corporation to operate throughout the whole country. Most state laws governing corporations are very lax and corporations seek out the state with the loosest laws.”

It is simple, wealth, like military might, and for that matter religious ideology should not be permitted to manipulate the public well being for its own purposes  because its purposes are inconsistent with that of democracy. The founders of this nation recognized the danger to a free society posed by militarism and religious sectarianism and attempted to address it in the Constitution, Bill of Rights and other fundamental documents of this country that make up our social contract. Those protections are now under intense attack and must be resisted.

Also, it is time to further that work by establishing additional rights to protect the individual from what Teddy Roosevelt called the “Malefactors of Great Wealth”. Just as it allows the free exercise of religion and the implied ability to protect ourselves from militarily imposed tyranny from within and without, our fundamental declaration of rights must include the protection of the individual and the social contract from those individuals and institutions of great wealth and political power whose interests are not  consistent with the liberty of the individual citizen. Abolishing our ability to take collective action through government as proposed by the libertarians is as antithetical to Liberty as would be surrendering our right to a common defense against those who would otherwise impose their will on us.

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