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Is the U$A a Democracy? with Tom Ferguson

Tom Ferguson, a leading expert on money and politics, weighs in on how much democracy is there with so much wealth and power in so few hands. Tom joins Paul Jay on theAnalysis.news.

TRANSCRIPT

Paul Jay

Hi, welcome to theAnalysis.news, I’m Paul Jay. We’re going to talk about the Democracy Conference, the Global Democracy Conference President [Joe] Biden has called with Tom Ferguson in just a few seconds. Please don’t forget year-end donations. If you’re thinking of donating some money at the end of the year, please don’t forget we’re a 501c3 in the U.S. We can’t do this without you and also subscribe, and share, and all of that, please. We’ll be back in just a few seconds.

Welcome back to theAnalysis.news. I’m Paul Jay, and we’re going to talk to Tom Ferguson about President Biden’s Democracy Conference. Tom is a Professor Emeritus at the University of Massachusetts, Boston. He’s the head of research at the Institute for New Economic Thinking. Thanks for joining us again, Tom.

Thomas Ferguson

Hi there.

Paul Jay

So a very simple question. Do you consider the United States a democracy? And what do you make of it? If at some level it is, what’s left of it, and where is it headed?

Thomas Ferguson

The short answer is authoritarian elements have grown a great deal in this system. They were built in from the start, but the environment of the fantastic growth of wealth and the imbalances in wealth.

Look, in the Gilded Age, you get Gilded Age democracy. Everybody knows that was hugely a joke.

Paul Jay

Okay, for people who don’t know what that means: Gilded Age, which is some of our younger viewers, because the way history, the way history is taught in most schools, kids don’t know nothing about history. Briefly. What do you mean?

Thomas Ferguson

Look, I used to begin in my classes by a timeline, and I would have World War I firmly located ahead of World War II, just to be sure. But that’s the period from 1870 on or so. In which the first great concentration of wealth was sort of capped by the merger movement in the 1890s. And that wealth distribution tended not to change a lot until the New Deal; that’s that old Gilded Age.

Paul Jay

If I’m correct, let me just add where people like J. P. Morgan and Rockefellers, they sometimes call them the Vanderbilts. They call them the robber barons. But these families, particularly Morgan and the financial sector, really start to assert enormous power in shaping the nature of the American government and society.

Thomas Ferguson

Yeah, my favourite story on that one is Samuel [Tilden]. I can’t remember whether Tilden said it or his friend who wrote it. Tilden was the guy who lost the 1876 presidential election, was sort of counted out in a special Commission. And Tilden’s name, he was a bank attorney in New York, and his name was the Great Foreclosure, the slogan. And one of his friends wrote him a note, it’s great. Where he just said, what we need is to put people in office who will not steal, but who will let us steal.

Paul Jay

In 1938, I think it was ’36 or ’38, [Franklin] Roosevelt, President Roosevelt makes a speech more or less saying that there’s a growth of American fascism. And he calls this when you get a sector of the economy of the elites become more powerful than the others in terms of government. That is, he called the definition of fascism. And he said the banking sector is becoming that.

Thomas Ferguson

I would be very careful with that story.

Paul Jay

Well, I’m quoting him directly.

Thomas Ferguson

I understand he said it, but he was, let us say, another couple of years, and we got a greater insight into what the nature of fascism was, I think in Europe in particular.

Paul Jay

Okay, well, whatever. The point there was, where is democracy? And I guess it’s compared to what? But as you say, there’s Gilded Age democracy; there’s democracy of what Roosevelt was talking about. So, where are we?

Thomas Ferguson

Well, look, after a certain point, I don’t think any representative institution can protect you against a colossal concentration of wealth. It’s like a hanging gardens approach. If they can’t buy the first person, they will find somebody in the system to buy. They will make extensive legal arguments. You can see more and more companies have been suing people who criticize them.

You find not one, but literally, some companies have 100 or more think tanks being subsidized of one type or another—this type of colossal range and breadth of ability to move. I am very skeptical that voting by itself won’t protect you from this stuff. It is, if anything, after a certain point, it compounds the problem. So, yeah, it’s pretty dangerous. I’m not making light of it.

The thing on fascism specifically, I think Arthur Rosenberg’s old essay, it’s not super well known. But Rosenberg was just one of the greatest historians of all time, and he’s really worth reading. I agree with him that the mobility is the use of, if you like private armies, I’m just going to capsulize. You could spin it out a bit; it is crucial in fascism. Where the state power has gradually pulled out, and private armies start to dominate.

There were people who thought they saw that under Ross Perot; they were wrong, as I said at the time. They were expecting perhaps [Donald] Trump to turn into that. That didn’t quite happen. And you have not really seen that, I think, yet in the U.S.A. You’ve got disorganized, violence, chaos all over the place now. But you don’t see organized private armies fighting in the street.

Paul Jay

Why do you need organized private armies? When the Hitlerite state emerged, and the Mussolini state emerged, they were the central state and had the army. They may have had some private goons in the streets and the lead-up to it.

Thomas Ferguson

They had lots. And I’ve worked a lot on Weimar in the ’20s and ’30s, and I’ve been in the German records on this and wrote one of the basic papers on corporate influence on German political parties. The private army combat in the Weimar Republic was really basic, and so was the whole level of violence. I mean, here you’re talking about 10, 20, 30 people getting killed, but hundreds over some time. People haven’t seen that in the United States yet, and I hope it never will come to that.

That’s why the question about prosecuting, say the capital insurrection on January 6, is so important. You shouldn’t be allowed to storm a government building and try to change the election and get away with it. But we haven’t seen anything like the level of violence in that, at least yet. I’m not telling you it can’t happen.

Paul Jay

The thing that doesn’t get talked about very much, especially in mainstream media, I know people that follow this are aware of what I’m about to say. But the extent to which the American quote, unquote ‘democracy’ has such undemocratic features so baked into it, and especially at the federal level, the Senate and the Electoral College. There are fundamental ways for the elites to control the outcome of political power that have nothing to do with democracy.

Thomas Ferguson

Okay, I don’t disagree with that. How can I? Anybody can read. James Madison gets the point, right. I mean, it couldn’t be blunter in some of those federalist papers. That said, let’s remember that under the American Constitution, you were able to do the New Deal. And I immediately concede also that that didn’t help reach a lot of people, including nearly all black Americans. Although I think as a group, they were better off after the New Deal than before, but by nothing like the average white.

But this is, to a considerable extent, I think, in other words, the question about how organized is the population able to put its own interests across. This is basically the heart of an investment approach to political parties. Who sort of picks up the bill for politics in a broad sense, including who can sort of even just do something like have an organization to monitor your school board, or something like that. If ordinary people are able to do that, the system will work. And if they can’t do that, that disorganization and inability to bear costs, it will not work.

And if you combine that system of disorganization, which is partly the result of folks who are very affluent, just piling on, stirring the pot, if you like. Then you got a real mess. I do think that the way to look at the political rules question is always in the larger societal context and particularly the larger economic context.

Paul Jay

So what do you make of this thing? Biden’s organized, inviting all these countries and trying to position the United States as the leader of the democracies against authoritarian Russia, China.

Thomas Ferguson

Well, let’s begin by observing. I think for all the problems in the Western democracies, they generally do function differently and better for people than in Russia, say, and mostly in China, too. Though, the Chinese growth experience, that’s quite worth considering just exactly how and what was going on there. I think that was a successful state-led growth. And it resulted, and a lot of people expected it to sort of result in more individual freedom. It did not work that way in the end.

Paul Jay

But the fair comparison with China, I don’t think, would be Western democracies; it would be India.

Thomas Ferguson

Yes, on certain dimensions, absolutely.

Paul Jay

Whatever you want, the Chinese, on the whole, have done a lot better than India’s had.

Thomas Ferguson

I’m not arguing. I don’t disagree. Though I’ve been to both, and there are some things in India that are quite remarkable. Let’s set that just aside to pick back; what’s Biden doing? My read is, look, democracy is an honorific term. They’re not seriously applying any sort of razor-sharp criterion here. It’s basically a rallying scheme.

Our folks tend to when they say democracy; they usually mean markets. And that’s what you’ve got here. An attempt to sort of spiff-up. For a while, it was globalization, right? And the American version of that was free markets under an American umbrella. And that didn’t really work too well. It blew of its own hubris very soon. And because of its own internal contradictions.

This is classic politics in a not-wonderfully salubrious sense, meaning it’s rhetoric basically. You’ll know, it’s not rhetoric when you see serious efforts to fix the Democratic deficits in the United States that you were just discussing, we’ve been discussing, and you were mentioning in particular, I take that stuff too seriously.

Paul Jay

Is this whole democracy event more about making Biden look like the leader of the free world for domestic, American opinion?

Thomas Ferguson

I’ve said, and we are clear in our paper, in the 2020 paper, that the American elite tends to believe its own — you’ll forgive my plain English glo-bologna — they were pushing globalization, American style free markets, say in 2000, and they still think like that. The plain facts are most of the world isn’t buying it one way or the other.

And the American-led political order has already collapsed in the sense that you’re into a multipolar system now. And so when the Biden people lecture everybody about rules and norms, it’s like this is a lesson that just comes from another world, the vanished world. And they’re going to have to; it’s getting a little scary, the way they lecture the rest of the world on this because I’m not sure they appreciate the sort of larger lessons of foreign relations outside of the legal context that has predominated in American law schools and universities.

When most of these folks who are actually working in the White House became lawyers or students of international relations, there’s not a whole lot of history taught in those things. And you can just contrast, say, Henry Kissinger or someone. He had an essay on how the Ukraine crisis would be resolved back about 2014, and it was very different from what everybody else was talking about.

It didn’t get resolved that way. And there’s a lot of irony in the way Hillary [Clinton]. Do you remember when Bernie Sanders and Hillary Clinton disagreed as to who should be friends with Henry Kissinger? Hillary was essentially undoing the Kissinger approach to foreign policy when she was pushing those aggressive moves in the Middle East and elsewhere to push Americans into places where I think it was an overreach.

Paul Jay

This idea of America, the free fight for American freedom, and so on, and so on, and democracy. Most American adults go to work every day and non-unionized, who most of them are, have no rights at all. If you want to talk about it, there’s no more authoritarianism than where you go every day, where you go to work.

Thomas Ferguson

Yeah. Let’s just generalize that point. If you have unions barely in existence and allow folks. I mean, what is the percentage in the U.S. now? Probably under 10%. Question of how you can measure the work?

Paul Jay

In the private sector, I think it’s like six.

Thomas Ferguson

Yeah, right. No, That’s right. If this is freedom, it’s a very strange kind of freedom. And it’s basically political rhetoric and mostly for domestic consumption. Look, I’m out of this. I have since COVID; I have not tried to travel much. But I can tell you I’ve been around before and a little bit during the rest of the world is not sitting around waiting to be led by the United States, now. It just isn’t. And folks got to sort of take that seriously. But in Washington, I’m not sure, officially admitting that it’s just something they don’t do.

Paul Jay

The Republican Party and certainly most of the corporate or all the corporate Democrats, but the Republican Party, perhaps, has been more open about it. Represent the interest of big corporations and nothing they don’t like more than the workers start getting more confident and getting more militant. And it’s happening.

They’re saying COVID partly. I guess it had something to do with some of the subsidies that the Republicans really didn’t like. And they didn’t like it not because it was going to add to the deficit, and that’s going to be inflationary. They never actually care about any of that. Or they would actually care about all this money that goes to arms. What they did care about was that it would break this pattern of intimidation of the workers. It would break this kind of discipline and desperation of workers to work for shitty jobs for shitty wages. And now the Republicans are going to be saying, well, we told you so because look what’s happening. And is this going to usher in a period of some kind of savage attacks to try to shake American workers, so they don’t feel like— Starbucks just got organized. The one in Buffalo. There are hundreds of strikes taking place right now as compared to a year or two ago; I think there were like ten. There is a militancy growing.

Thomas Ferguson

Yeah, I’m not arguing that at all. You can see a big turnaround in the Teamsters Union where a major upset in who heads the union. I would certainly agree with that. Now, this question of let’s go back just for a second, because we actually treat in our paper on the 2020 election in some detail the COVID debates in 2020 over as they were passing those bills.

Now, exactly as you suggest, you could see, especially Republican congressmen and women saying we cannot have wages going up. They were perfectly blunt about it. They said it just like I’m talking to you right now or there. The Democrats were sort of mixed. We treat that, I think, just perfectly normal. The big, capital intensive and often high tech. Not quite the same thing. Firms didn’t worry very much about low wages in that context. They could work from home and continue going, and they went along with it.

You may remember when I think I’ve alluded to the Robert Rubin essay in the New York Times, where he wanted a mix of economics and medical folks making policy there. That was quite different from the Trump approach, right. Where it was basically a kitchen cabinet and then Trump berating his own experts.

Now it is, however, troubling how rapidly the Biden administration dismantled the COVID protections when they didn’t get rid of COVID. And that was a movement that had very substantial Democratic Party support. Now that then leads to the question of what’s going to happen, as you suggest in the future.

Now my reading is that you look at the New Deal as policies begin to collapse. You have to see what people do. I suggested in an earlier interview with you that the big story in the New Deal was not anything any President did, although Roosevelt helped by not trying to smash it. I mean, he was willing to let the political forces play themselves out. Biden might do that. I’m not quite sure [inaudible 00:21:39], but he’s not going to initiate it. Something would have to come from below.

Now, you do have turnover in the Teamsters Union. You do have a movement now in the National Labor Relations Board to redo the Amazon election in Alabama. That’s a really big deal. If that election were to turn out this time in favour of the workers, you may see a rash of organizing, and yes, for sure. You see, strikes all over. Our paper discusses this because I was very strongly supporting efforts to try to study the actual workforce behavior in 2020, when nobody else had any numbers around. We supported the project to start counting.

Now the question is, what will happen there? I’m not sure. It does not help that the AFL–CIO [American Federation of Labor and Congress of Industrial Organizations] right now is looking a bit like the old AFL, meaning it’s kind of paralyzed at a moment when you think they could be moving fairly boldly.

Some of the construction unions, for example, have been really not constructive at all on what I would think of as basic worker safety issues. And the whole question of masks has been way more disputed in labour than it should have been. Although Richard [Trumka] finally just said, People need to wear them, but he’s gone.

And you’ve got to fight inside the AFL-CIO; it’s the clear differences between people who will be the next President. They got to resolve this stuff, and they need to get moving, I think. In the ’30s, when the AFL split, the CIO emerged; maybe it’ll takedown again, I’m not sure.

But right now, there’s a vacuum forming and in an inflationary period where prices are running ahead of wages in general, which I think is clearly true now, with all the qualifications that we’ve done in other interviews about earlier aid to workers. This is very unstable; it’s not to sound sort of like a social science for one second. It’s not an equilibrium. Something is going to happen.

Paul Jay

Well, it’s been a long time, I think, 20-30 years, at least maybe more, where there’s been a real window for workers to gain some leverage. Globalization really undercut American, Canadian, European workers. But COVID and this shake in the global supply chain and the fact that the increased rivalry with China, they can’t trust. This economy is so dependent on importing goods from Asia, especially China. But other countries too. Which is going to give, is giving workers some leverage here. And boy, they better take advantage of it.

Thomas Ferguson

I’m not disagreeing at all. Just to mention a few problems, though, just because it’s clear to me that the education system has been really hammered. It was in trouble because of years of defunding and basically relentless Republican attacks, usually financed by billionaires. For a long, long time, it was already in trouble. COVID stuck schools with an impossible situation at every level, which was you suddenly had all these new costs, new problems. You couldn’t even meet your pupils without making everybody potentially sick. And I think that the entire education system from top to bottom is slid into a kind of crisis.

Higher Education is clearly facing serious trouble. Now, there are a lot of strikes in higher education. That’s a strike at Columbia University right now, for example. Where I think the University has behaved not well, to put it bluntly, but it’s not the only place. There are a whole bunch of strikes at universities.

Something like 25% of the UAW [United Auto Workers] is, I saw it one recent, is now coming out of academia. We may know when the UAW has a problem if President got indicted. And it’s just one more example of what you have as problems in the American Labor movement there.

So the collapse of sectors like education, I think, will cause a lot of distress. It has huge impacts on labour supply, and it’s doing it right now because every time the COVID revives, anybody who’s got a kid has to worry about what happens. But if your school sends the kids home or something like that, which they do with this being regularity because they’re not able to fix themselves there. And you also see burnout among the people who have to deal with this. I mean, in a lot of schools, I know my neighbours say the teachers just call in sick on Fridays and things like that; they just can’t live with this.

So this type of system collapse is going to lead to labor turmoil, but it could also lead to really big disasters that impact a lot of people. And it becomes politically, very fragile and unstable.

Paul Jay

Well, let me just end by saying what I just said. I’ll just say again; there’s never been a better time in decades. If you’re not in a union, get organized and get one. And if you’re in a union, fight to democratize it and make sure the union really represents you because, in a lot of cases, they don’t. If you want democracy in the United States, it ain’t going to be Biden conferences with empty rhetoric. It’s going to be workers getting organized, as you keep saying. And I keep saying anyway, thanks very much for joining.

Thomas Ferguson

Amen.

Paul Jay

Thanks, Tom, and thank you for joining us on theAnalysis.news. And again, on your end, if you’re thinking about donating, please keep us in mind. Thanks for joining us.

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2 Comments

  1. Pardon my second comment! An armchair historian’s view of democracy:
    In trying to find a good characterization of democracy that is political rather than economic as advanced by the unnamed Chinese official of my earlier comment, I look back to the birth of democracy under Cleisthenes in ancient Athens. What he accomplished was the suppression of other, would-be tyrants by empowering the demos. That offered a political climate that enabled the victory over Persia by the rowing demos of Athens who became prosperous and thus had time to spend in the Agora. So, two elements: the elites were restrained and a war brought prosperity. Aren’t these the characteristics of the New Deal of the 30s and the victory in WW2? Very regrettably, Athens soon succumbed to militarism and war with Sparta, and the US soon succumbed to militarism and imperial war-making.

  2. Thomas Ferguson may be a fine journalist, but he did not answer your question!
    You, Paul Jay, asked him, “Do you consider the United States a democracy?” He replied, “The short answer is ….” There followed about 50 words.
    The short answer is either “yes” or “no”. Ferguson’s 50 word reply did not amount to a “yes” or a “no”.

    I am not surprised. There are few journalists who answer the question directly. I believe journalists of quality do answer it, negatively. My answer is less important, but it is no!

    At this time, there is a dialogue on this question, internationally. I have heard a high Chinese official state that democracy has to be understood and evaluated it terms of a governmental system’s success in advancing the well-being of its people. The past two decades of advancement of the Chinese and the Russian peoples would place their systems in the top echelon of world democracies by that measure. The United States, a failure!

    I think the argument of the Chinese official is a strong one.

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