Plunder, Not Merit, Enriches and Empowers the Ruling Class

Plunder, Not 'Merit,' Enriches and Empowers the Ruling Class
from the New Unionist, April 2002


By Nathaniel Graham

In Plato's "Republic" an ideal society is described in which rulers are chosen for their superior intellect and merit, and where justice is the guiding moral principle. Plato rejected the principle of democracy, or rule by majority, because it attaches no special qualifications to political power.

This sentiment was largely shared by the Founding Fathers. In the debates on the Constitution, James Madison pointed out that if elections in England were open to all classes of people the property of landed proprietors would be insecure. An agrarian law would soon take place, democratically giving land to the rabble.

Such an event was regarded by the Federalists as pretty much a worst case scenario. To prevent such an injustice it was recognized straightaway that authentic power had to reside with the "men of best quality," and exercised by "responsible men" who could be counted on to wisely judge their own interests as well as the interests of the whole population.

Although few will admit to it openly, rejection of democracy in this sense is a standard belief which is shared among virtually the entire ruling elite even today.

Of course, then is not now. The situation today is significantly different in at least one important respect, namely, the modes of production and exchange.

Like all of the founders of classical liberalism, Madison lived before the industrial development of capitalism. The composition of the labor force was radically different in his day. At the time of the American Revolution less than 10% of the population rented out their labor to an owning class (i.e., worked for someone else), while almost everyone else was self-employed. Today, those percentages are nearly reversed.

Modern capitalism has substituted the motive of private profit in place of public duty. Filling in for the "benevolent philosophers" and "enlightened statesmen" envisioned by Madison, we have giant corporations like Enron. The principal qualification for political power, far from being individual merit, has become the ability to raise vast sums of money by selling out to whoever has it. Proof: the 2000 presidential election.

It's kind of interesting to see how these issues are played out in contemporary American culture, especially among conservatives. What's even more interesting is that this kind of influence peddling is considered completely normal and even virtuous among certain sectors of the business community.

Recently, Bill Moyers did an interview with Bob Bartley, the conservative editor of the Wall Street Journal, for his new PBS series, NOW. One of the more heated exchanges went something like this:

Bill Moyers: Should corporations like Enron be able to give as much money as they want to the politicians?

Robert Bartley: I think so, as long as it's adequately disclosed.

BM: Doesn't this unbalance the very capitalist system toward the excesses that you're concerned about, if they have that much power? If they have that much power, that much influence, they can get away with a lot, Bob.

RB: Yeah, but you're assuming everyone is on one side, and that's not the way these usually turn out. You'll have Enron on one side and some other big corporation on the other side, and . . .

BM: But people with money have more clout than people who don't.

RB: Yes, it's better to be rich than poor.

BM: But is that what democracy is about?

RB: Yeah, equality of opportunity.

BM: Equality of opportunity as defined by wealth?

RB: Well, some people get wealthier than others if you have equality of opportunity. But if you try to level society, then nobody's going to do anything.

Mr. Bartley's unstated premise is that capitalism is a system of social advancement based on individual merit and ability. That's the message that an army of conservative talk show hosts and other corporate errand boys are constantly trying to drill into our heads.

That message is everywhere: radio, television, newspapers and magazines. You can hardly escape from it. Here in Los Angeles, I have 60cable channels and they're all obediently reinforcing the same message. I don't even need a remote.

Capitalism is a wonderful thing, we are told, because without such incentives, "no- body's going to do anything."

Absolutely brilliant, really. There is just one problem with this picture. A closer examination of how capitalism actually works - who does the work, who gains the wealth and how that wealth is accumulated -reveals that Mr. Bartley has it exactly backwards. Capitalism as it actually exists functions more like an inverse meritocracy, a system of social advancement based on the exploitation of the members of society who actually perform the work, and who therefore create all value.

At the core of Mr. Bartley's argument is the assumption that economic status is deserved. The religion that wealth is the ultimate yardstick of personal merit has been portrayed by the wealthy as some kind of iron law of economics. Within this warped framework of understanding, the entire conservative agenda makes perfect sense: the rich deserve political power, while the poor deserve a boot on the neck.

That's the Republican version of Plato's ideal society.

The Enron scandal provides us with a good opportunity to see that society in action.

Enron was not an energy company in the traditional sense. It was an energy trading company, meaning that it did not actually produce energy. Profits were generated by buying up energy credits at low prices and selling them at high prices. According to the conservative paradigm, that's supposed to be how real value is created.

So here in California, for example, the energy game was pretty straightforward. Energy contracts were hoarded, shortages were artificially created at precisely the moments of peak demand, and piles of cash were scooped up with a big shovel provided at taxpayer expense.

The Enron business model of buy low, do nothing (except for bribery and market manipulation) and sell high isn't just some aberration, some bizarre exception to the "free market" system. For the owning class that's pretty much how capitalism works in general. It doesn't matter whether the items "bought low and sold high" are energy credits, people(labor power) or lifeless commodities. The general profit-making method is the same.

Of course, two seconds' worth of thought shows that this kind of "investment" activity contributes nothing to the real economy. In fact, it is extremely wasteful and destructive. The owning class is economically useless at best, parasitic and destructive at worst.

Meanwhile, the working class (accounting for roughly 90% of the population) is being robbed on a massive scale. That's called "democracy."

Under industrial capitalism, the ideal society, originally conceived by the Founding Fathers as a meritocracy and advertised as a democracy, has been transformed into something more like a plutocracy.