A Kind of Defeat
In the aftermath of the fall of the Soviet Union, a great many people, including me, joked that the real victor in the Cold War had been Japan. That was before Japan fell into a long lasting slump and the United States, led by a government that adopted unremarkable but sane policies, enjoyed a massive boom. In longer retrospect, however, we are learning that the capitalist political economy really did lose the Cold War, not capitalism as the ideological bugbear of the left or the shining ideal of the Chamber of Commerce, but the capitalism that actually functioned during the years of American greatness. That capitalism was a mixed system of predominately private ownership balanced by strong labor unions; independent scientists and academics partly financed by public money, a sometimes principled Press; an activist government supported by votes as well as dollars; and, above all, by the egalitarian sentiments of both owners and workers. That system is dead.
The old system depended an organization of production—mass production employing huge numbers of interchangeable, semiskilled workers—now obsolete; but it also emerged and persisted because governing elites recognized that only a system seen to benefit a majority of the people could compete with Communism or enforce universal conscription in an age of mass armies. As the objective need for popular support eroded, policy intellectuals, whose enthusiasm for democracy had always been guarded, became outspoken in support of an oligarchy consisting of the magnates best able to pay for their services. The word Democracy was kept around for propaganda purposes, but every effort was made to suppress political participation and otherwise ensure that elections had nothing to do with the meaningful consent of the governed. Where the old system redistributed income to counterbalance the relentless tendency of the corporate economy to concentrate wealth in fewer and fewer hands, the new system actively promoted a deeper and deeper divide between the haves and have nots even at the cost of hindering aggregate growth. It remains to be seen whether this New Domestic Order can persist for very long—if nothing else, the running up huge deficits and the buying off or shushing inconvenient scientific advice about ecological problems isn’t a permanent solution unless, as some of these folks apparently believe or hope, the end of the world really is near.