Part two of this series on capitalism and democracy introduced the unusual idea of ‘democracy failure’. Instead of seeing democracy as the hapless victim of capitalist markets, as Marxists and others have typically done in the past, it examined the way market failures happen when the power-humbling mechanisms of monitory democracy are not applied to capitalist markets. This third part extends the point. It probes Jane Mayer’s recent fine book _Dark Money to understand how democracies such as the United States are not only ruined when the wealthy try to buy their way into political power, but also why plutocracy is preparing the way for further market failures._
Signs of our troubled times: in a southern hemisphere democracy, where the wealthiest 20% of households are now 70 times richer than the bottom 20%, a prime minister gets back into office with the help of a million dollars from his own pocket. In the northern hemisphere, in the heartlands of the European Union, an avowedly socialist party governs a country in which the average disposable income of the wealthiest 0.01 percent is seventy-five times that of the bottom 90 percent. A few time zones away, in the most powerful democracy on the planet, the wealth of the 0.1% super rich has reached near-record levels. During the past three decades, their share of total household wealth has trebled. They’re worth nearly the same as the bottom 90% of families now feeling the pinch of rising debt and stagnant income.
The figures are disquieting, but Jane Mayer’s excellent book shows, for the case of the United States, that the genuinely alarming trend is the way private wealth is fast becoming the single currency of democratic politics. Dark Money is muckraking journalism at its finest. It’s equal to anything written by Ida Tarbell, Nellie Bly and the best of the influential female muckrakers of the Progressive era a century ago. Meticulously researched and elegantly written, it shows how things have slipped, and why there’s now so much new muck to be raked.
Dark Money is a serious book, even though some of the plutocrats whose lives it probes seem utterly risible figures. Consider Corbin Robertson Jr., king of coal, whose business empire is protected by front lobby organisations sporting ill-chosen names like Plants Need CO2. Or Robert Mercer, a computer scientist whose pet algorithms hit so much pay dirt on the stock market that he could indulge a multi-million dollar toy-train fantasy, as well as protect himself against law suits launched by domestic servants, who complained of bullying and docked wages after they’d failed to replace shampoo bottles in his bathrooms when they were less than one-third full.
Laughable these characters may be, but Mayer, an award- winning staff writer for the New Yorker, shows that the dark money business is no laughing matter. Zooming into the personal lives of a small but entangled circle of billionaires, she shows they’re almost entirely men, well-heeled magnates who have a penchant for secrecy, as do the Koch brothers, the richest pair of individuals on Earth, who protect themselves against snoopers when in meetings by using white-noise loudspeakers. Successors of the 1890s Gilded Age steel barons and railroad magnates, these men have mostly made their fortunes from close ties with big banks and credit institutions. Members of the gilded 0.1 percent, they’re like-minded group thinkers, ‘conservative libertarian’ ideologues, says Mayer. They are accustomed to getting their own way, and to thinking of themselves as right-thinking men on a mission. Charles Koch, who feared that Obama would become another Franklin D. Roosevelt, and did everything to ensure that he wasn’t, sums up their way of thinking: ‘It is markets, not government, that can provide the strongest engine for growth, lifting us out of these troubling times.’
Mayer misses the chance to track the connections between these plutocrats and the tightening grip of finance capital on the American economy. Her broad case against their damaging effects on American political life is nonetheless pretty compelling. These plutocrats are hypocrites, she shows. Their stated commitments to ‘limited government’, lower personal and corporate taxes, and minimum state support for the needy, all function as cloaks for their fossil-fuelled, private greed. Despite their ‘libertarianism’, Mayer notes, many have made fortunes with the help of state contracts (during his swearing-in ceremony, Obama stood on a handsome red-and-blue carpet manufactured by a subsidiary of Koch Industries).
So why are these men with deep pockets so openly hostile to ‘big government’? All of them, Mayer explains, gain from light-touch tax policy and limited government monitoring of regulation of business. They like tax dodging, and shady off-shore investment and trading deals, and hence their troubles with the law, and their dreams of lording over their business empires, without legal interference and restraint.
Mayer too easily supposes that these plutocrats are taking democracy to hell in a hand basket. She could have spelled out what she means by democracy; justified her decision to say virtually nothing about Bill Gates, Mark Zuckerberg and Google; and better explained why fat cats might end up scratching out the eyes of the American republic. The clear and present dangers they pose arguably exceed their violation of democratic principles of equality, or their efforts to buy the political system. These billionaires are environmental hoons. Their close links with Wall Street make them collaborators with the next big market bubble, and the next crash. Their winner-take-all wealth is damaging the fabric of social life. These plutocrats produce much more than wealth. Merchants of social injustice, they bear responsibility for the fact that growing numbers of American citizens are sick, obese, unhappy, unsafe, or in jail.
Liberal-minded Mayer no doubt shares these objections to plutocracy. But still her otherwise compelling account of dark money has flaws. Mayer’s reliance on the term oligarchy (drawn from the work of Jeffrey Winters) is questionable. It overstates the unity of dark money men and understates their knack of nurturing patron-client patterns of dependency throughout every nook and cranny of American society.
The book harbours a tension: the image of secretive oligarchs operating from the shadows doesn’t quite square with their subsidised networks of think tanks, academic programs, advocacy groups, lobbyists and favoured law firms. The key point is that these billionaire magnates are not the low-profile oligarchs that Fortune once called ‘the invisible rich’. They are in reality substantial employers, entertainers (think of the Coors brewing family of Colorado) and power brokers operating within the entrails of the whole body politic. They are plutocrats with Chinese characteristics: billionaires who love lucre and social influence, but who have no great love of elections, or democracy.
Something else of consequence is missing in this otherwise magnificent book: its puzzling silence about the way the men of dark money can ditch white-noise encampments and play the populist card. The Trump card. For this 2016 election alone, the Koch brothers have amassed an election war chest estimated at close to $900 million, a record in the history of American democracy. They’ve so far managed to bank-roll the Republican vice-presidential nominee Mike Pence, and have him on their side. But Trump is not (yet) their man. His whole campaign, full of wind and whoops and wild promises, smacks of verbal hostility to the billionaires. It comes peppered with ‘I am your voice’ appeals to ‘the forgotten’ and ‘the American people’. It’s a species of populist elitism that combines plutocratic wealth with plebean style - a strange strain of democratic politics much-feared by ancient Greek democrats because they were convinced it pushed democracy towards demagogy and tyranny.
The new fat cat populism is as American as burgers and fries, but can it work? Can Trump successfully combine a leader’s haughty praise for ‘the people’ with secret contempt for ‘the people’ who yearn for a Leader? Can the piper pay and play the winning tune? We don’t yet know, yet one thing’s certain: the plutocrats featured in this book are wondering, watching, and planning their next moves.
An earlier version of this field note first appeared in the Sydney Morning Herald and The Age (Melbourne), 6 August 2016.