Global Intifada

The following is an extremely rough draft of a paper I’m working on. I’ve edited this significantly since writing this and am still working on inserting the citations. I’d like to get some critiques of the overall structure and argument of this piece before I do any more work on it.

Preface

 

One of the stated objectives of American foreign policy for over a century has been to promote democracy all over the world. This objective was invoked by the Bush administration to justify its invasion of Iraq after its other reasons, that Iraq had some sort of link to terrorism or was in the process of developing weapons of mass destruction, were exposed to be downright false. It should be noted that these two charges (promoting terrorism and developing weapons of mass destruction) raised against Iraq are just as equally applicable to America which has had and still does have links to various terrorist organizations (such as Mujahideen e Khalq) and is constantly in the process of developing weapons of mass destruction or remained remarkably silent about other country’s developing WMDs such as North Korea, Pakistan, and India. If these two charges were proven to be false, then it should come to no one’s surprise if the benevolent desire to promote democracy is also not the true motivation of American foreign policy in the Middle East. Firstly, regardless if democracy is a good thing, it was a violation of international law for America to unilaterally invade a sovereign nation for its own ideological purposes. The only grounds for such an attack would have been a potential imminent threat or responding to an already existing attack. When the two reasons for invading Iraq were proven to be false, the grounds for the war were nullified and the attack was transformed from one that was defensive and thus recognized by international law to one that was offensive and thus in violation of international law. Let us be clear, then, that the war in Iraq is in reality a war on Iraq. Democratization is not a sufficient ground to invade a country, bomb it into smithereens, and terrorize the people. Since over 665,000 have died in Iraq and the number of terrorist groups in that country has mushroomed exponentially, it could be argued that the human rights of the Iraqi people were violated more by the American invasion than the totality of all of Iraq’s previous regimes. The second point to be made with regards to democratization is that if the U.S. government is going to expend massive amounts of resources to the extent that it will violate international law to pursue its purported obsession to democratize the whole world, it would be prudent to begin a process of democratization at home. In this essay, I hope to show that the American political system is not only not democratic, but downright anti-democratic in both its form and substance. By showing that America is undemocratic, the claim that it seeks to promote democratization will be exposed as fraudulent, just as its objective of fighting terrorism and eliminating weapons of mass destruction have been largely exposed as being false as well. By eliminating the justifications for its foreign interventions, it should become clear to a reasonable person that the true motivation for such actions is self-interest and world domination.

 

Introduction

A democracy is defined as governance by the people. The people participate in government in a direct manner: they pick their leaders without any intermediaries; they participate in legislation themselves; and they participate in adjudication either as judges or as members of a jury. A republic is defined as governance by the people through representatives. The central thesis of republican government is that democracy has some unruly and inefficient aspects. In large states, direct participation in the various branches of government would be impossible to manage. Instead, the people will choose individuals to represent them. American is neither a democracy nor a republic. The people do not participate in governance directly nor do they actually choose their representatives. Anti-democratic obstructions exist in three ways: (1) structurally, (2) politically, and (3) economically.

 

In part one of this essay, I will show how America is not a democracy due to the very structure of government set up by the Constitution. In parts two and three of this essay, I will show how Americans do not choose their own representatives, rather, representatives are chosen by themselves, political parties, or corporations.

 

Structural Obstructions Arising from the Constitution

 

The first thing to become aware regarding the Constitution is that it is an reactionary document that was the by-product of a complex dialectic and many compromises. This view was first fully extrapolated by Charles Beard who published An Economic Interpretation of the Constitution in 1913. Beard argues that the framers of the Constitution were primarily concerned with their class interest. He engages in a thorough scrutiny of the financial backgrounds of the framers and shows that they were comprised of: (i) creditors, (ii) debtors, (iii) landowners, (iv) manufacturers, (v) merchants, (vi) bankers, (vii) slaver owners, (viii) ship builders, and (ix) owners of state and continental securities. The primary concern of this class of people was to preserve their economic interests from being stolen from a spontaneous communitarian democratic movement that had arisen as a result of the policies of this class.

The post-Revolutionary period was one of dire economic hardship. During the War, Britain had destroyed farms and plantations, taken large numbers of slaves, and instituted a blockade which disrupted commerce and retaliated against the new born country by closing off the British West Indies to American ships seeking to sell foodstuffs and lumber and canceling favorable tariff treatments for products such as indigo. Compounding this problem was the crushing war debt that the government owed. The foreign debt amounted to $11,710,378.62 and was owed primarily to French and British private creditors. The domestic continental debt amounted to $40,414,085.94. The state debts were estimated by Hamilton at $25,000,000. The total amount of debt that the country owed at the end of the 1790s was a whopping $76,096,468.67. Given the perceived weaknesses of the Confederation Congress, most states implemented taxes that were three or four times higher than under the British.

To make matters worse, the entire global economy was suffering from a shortage of specie due to aggressive Spanish colonialism in Latin America that resulted in the exhaustion of the gold and silver supply. Total world gold production had been dropping at a precipitous rate. From 1741 to 1760 there were 781,000 ounces of gold. From 1761 to 1780, around the birth of the nation, there were only 572,000 ounces of gold in the global market. This resulted in a serious decline of currency in the country. Right before independence, there was $5.30 per person in government paper in circulation. In 1786, this number had dropped to $1.90, and by the end of the 1790s, when the Constitution was written, the available currency was only 30 cents per person. To place this in proper perspective, the drop in national production at this time had been 46% while the drop in national production during the Great Depression was 48%. Since many states legislated that the payment of taxes could only be fulfilled by payment in gold and silver, many people were unable to pay taxes.

Farmers were more acutely affected by debt and taxes than others. The scarcity of money resulted in livestock prices falling by half and land losing two-thirds of its value. Some farmers responded by selling off their bonds to rich elites at increasingly depreciating values until only 2% of the population came in control of 96% of the bonds. As will be shown later, many of these bonds found their way into the hands of a good portion of the framers. For farmers without any bonds, they were placed in a horrific catch 22: either they kept their land and paid taxes with whatever means they had, but failed to pay off their mortgages or they sold their land to generate hard currency to pay the taxes. By failing to pay their mortgages, they were often sued and had to pay court fees when they lost. Moreover, their property was foreclosed and they were often thrown into debtor’s prisons. This resulted in a shortage of useable land to pay off mortgages and resulted in even more land foreclosures. Since some states had property requirements for participation in government, debtors were excluded from political process. Thus, the agrarian class became associated with the debtor class.

The agrarian-debtor class began developing radical techniques and ideas to deal with their indebtedness. First, they petitioned their legislatures to restore or increase paper money in order to depreciate the burden of the debt and to restore public land banks. Second, they exerted pressure on the judiciary, inducing them to dissolve contracts and delay the foreclosure of homes. Not long thereafter, they began developing radical ideas about democracy itself, some of them calling for the equal distribution of property as a means to preserving democracy. When legal means proved insufficient, they simply rebelled. Disturbances broke out in Virginia, New Jersey, Pennsylvania, New Hampshire, South Carolina, Connecticut, and of course, Shay’s Rebellion in Massachusetts, ranging from passive resistance in the form of raunchy protests to violence in the form of brawling, shootouts, and downright insurrections instigated by organized militias. In short, a second American revolution was brewing against the dominant class due to their economic policies which enabled them to accrue benefits at the expense of the masses. According to the Beard school, the “anarchy” being caused by such economic and political conditions created a climate of fear of equalization of property that led to the rise of the nationalist government movement that led to the Constitutional Conventions.

For Beard, the creditor class stood to gain immensely from the formation of a centralized government as envisioned in the Constitution. He estimates that holders of securities gained $40,000,000 through the adoption of the Constitution and the formation of the new government and was the equivalent of every man, woman, and child in the entire United States at the time from New Hampshire to Georgia being paid $10. The manufacturing, shipping, trading, and commercial groups also gained from the Constitution since it promoted the independence of the Executive branch in matters of foreign policy and enabled these groups to acquire protection from foreign competitors through tariffs. The tariff system was also intrinsically important to the survival of the government as it provided 90% of the national government’s income and enabled it to acquire a surplus by the late 1790s which in turn enabled the payment of bonds that were held by an extreme minority of investors. For Beard, these are but some of the proofs that the Constitution promoted remarkable payoffs for the elite.

Perhaps the best indication of the class interest of the Framers of the Constitution is the form of government they envisioned through the Constitution. Beard points out that the Constitution preserved the class interest in three ways: (1) first, it gave explicit positive powers clearly focused on economics, (2) it placed severe restrictions on the state legislatures in economic matters, and (3) it created a government with clear anti-majoritarian restraints.

The first way that the Constitution promoted the class interest of the Framers is in how the major powers assigned to the federal government were almost entirely economic in nature. They included the power of taxation, war, commercial control, and disposition of Western lands. Beard also pointed out that the question of slavery had been deferred as well due to economic concerns by Southern plantation owners. Moreover, the taxation scheme given to Congress would still grant protection to real and personal property. He also argued that the primary purpose of placing military forces in the hands of the President was really designed “to guard the states against renewed attempts of ‘desperate debtors’ like Shays” as well as to enable the U.S. to compete in global markets against European powers. The commerce clause promoted the vision of the “economic forces in towns and young manufacturing centres” by essentially creating a “wide sweep for free trade throughout the whole American empire.” These powers, along with the right to regulate Western lands, illustrate that the framers sought a particular economic paradigm to be promoted through the Constitution.

The second way that the Constitution promoted the class interest of the Framers is in how it restricted the independence of state legislatures, especially in economic matters. Beard points out two particular clauses: the prohibition on paper money and the contracts clause. The former clause was clearly directed at the agrarian-debtor class’s demands for increasing paper money. It specifically mandated that only gold and silver would be valid legal tender. The contracts clause is another restriction that specifically targeted the agrarian-debtor class since it prohibited the termination of contracts which was so frequently demanded by them in courts and legislatures in order to absolve them of their debts. Interestingly enough, the clause itself was rejected twice at the Philadelphia Convention. How did the contract clause find its way into the Constitution if it was rejected twice during the convention? It was deviously inserted by the Committee of Style by none other than the arch-federalist, Alexander Hamilton, who would go on to create the country’s first national bank that would pay off owners of the securities with interest. Recall that these securities had once been owned by the farmers who were forced to sell them at depreciated value in order to pay off their debts and taxes. By the time the Constitution was ratified, over 96% of these securities ended up in the hands of only 2% of the population. The government raised the funds to pay off these security owners, ironically, through the new federal tax system which placed the power of the purse in the hands of Congress and the power of the sword in the hands of the Executive. By removing the power of legislation away from the states, the Framers ensured that no disgruntled populists would co-opt the economic interests of the dominant class by overwhelming the state governments. If such revolts did occur, they could be swiftly put down by a centralized military that wasn’t comprised of militias sympathetic to the populists. In fact, this is what George Washington did immediately after the Constitution was ratified when he put down the Whiskey rebellion.

The third way that the Constitution promoted the class interest of the Framers is most evident in the structure of government that was set up which contained clear anti-majoritarian restraints that seemed to have been directed at the popular actions of the farmer-debtors who applied enormous pressure on local and state legislatures and judges to acquiesce to their demands. While the House of Representatives was elected by the mass of the people, Senators were appointed by state legislatures, the overwhelming majority of which had property qualifications with strong distinctions between upper and lower houses. The President was not truly elected by the people, but instead elected by a group of electors selected by state legislatures as well. The judiciary was chosen by this undemocratic President and Senate. Members of the House served for two years, the Senate for six, the President for four, and justices of the Supreme Court for life.

The undemocratic nature of the Constitution is further supported by the fact that only 5% of the population participated in its ratification. Compare this with the voting participation in some of the state constitutions. For example, in Pennsylvania, the total population that participated in the ratification of the state constitution was double the number than those who participated in the ratification of the federal Constitution. In addition to such low voter turnout, there are some serious questions as to the legality of the Constitution itself.

In Our Unconventional Founding, Bruce Ackerman and Neal Katyal argue that the Constitutional Convention violated the Articles of Confederation, violated state Constitutions, and that the Federalists utilized unlawful tactics to get anti-Federalists to acquiesce to their demands. Ackerman and Katyal begin their analysis by comparing the amendment process of the 13th and final article of the Articles of Confederation with the ratification procedures laid forth in the Constitution. Unlike the Constitution which called for only 9 states to ratify it in order to be legal, the 13th article received the unanimous consent of the 13 states. Thus, the Constitutional Convention was initiated in direct contravention of the explicit wording of the Articles of Confederation which mandated that the Continental Congress propose the amendments and then send them to the various state legislatures for approval. The Constitutional Convention did not receive explicit congressional approval. Moreover, the ratification process of the “amendments” proposed by the Constitutional Convention diverged from the Articles by getting them ratified by the special conventions of each state as opposed to the state legislatures, who were put into power the people. Due to the lack of authorization and concerns that their respective constitutions were being violated, many states objected to the calling of the Constitutional Convention, questioning its very legality. Rhode Island refused to send a delegate at all. New York and Delaware also caused many problems. Of the three delegates from New York, two walked out. Delaware’s legislature expressly barred the delegation from agreeing to any proposal that deprived the state of its voting power under the Articles. Thus, ten delegations were urging nine states to overthrow a system that had been ratified by thirteen states!

Even when such questionable legal arguments failed, Federalists resorted to heavy handed tactics to procure acquiescence to the Constitution. For example, Federalists in Pennsylvania demanded an immediate call for a state ratifying convention. However, the Pennsylvania constitution required a six-month pause between the time amendments were proposed and the time a convention would be elected. The Federalist majority in the state House ignored these legal restrictions and pushed forward with a plan to hold an election within 9 days. A Federalist mob seized state representatives James M’Calmont and Jacob Miley by violently breaking into their houmes, tearing their clothes, and dragged them through the streets of Philadelphia to the State House all the while abusing and insulting them while the House formed to finish its resolutions. Such practices hardly sound like the actions of law-abiding citizens. While such practices were the exception, not the rule, Federalists also offered carefully crafted promises that were in effect, bribes, such as by offering the Presidency or Vice Presidency to John Hancock in a New York convention tightly divided over the issue of ratification.

Based on the questionable manner in which the Constitution was proposed, developed, and ratified, its clauses that seemed to specifically target the farmer-debtors, and the anti-majoritarian obstructions it instituted, a credible argument can be made that the Constitution was not a democratic document and not truly representative of the will of the people at the time of its making. Of course, that was over 220 years ago and the Constitution has been amended several times, surely it is more democratic today?

 

The Constitution Today

 

In order to evaluate whether America is a democracy, instead of focusing on speeches by its leaders, fancy graphics on its news channels, waving of flags at national holidays, or chanting “USA!” at sports events, a scrutiny of its political system is more appropriate. The Constitution sets up a dual system of government where powers are divided between state and federal governments. The federal government is a tri-partite system where powers are divided between a legislative branch, an executive branch, and a judicial branch. None of these branches is truly democratic. If the integrals of an object share a certain property, then the object as a whole can be said to possess that property. Thus, if the branches of government are undemocratic, than the system of government as a whole can be said to be undemocratic. Let us evaluate the American political system from the least democratic to the purportedly most democratic branches.

Of the three branches of government that make up the federal government, perhaps the most undemocratic is the judiciary. Federal judges, whether to the Supreme Court or to the District or Circuit Courts, are entirely unelected positions. Given that they are unelected, one would expect federal judges to have short terms, but in reality, they have the longest term of any other political agent: life. How long is a life term these days? The average term of the first ten justices on the Supreme Court was under eight years. The first ninety justices left the pre-1970 Court, on average, after fifteen years at age sixty-eight. However, between 1971 and 2000, judges served an average of 25.5 years and retired at the age of 80. Moreover, the Constitution is silent on what to do if one of these justices becomes disabled. So when Justice Douglas had a stroke, the other justices just decided not to count his vote. In spite of being disabled and confusing dates and places, he served for almost a full year in this manner. Long terms for unelected judges who may or may not be mentally disabled but whose power to interpret the Constitution is absolute hardly sounds characteristic of a healthy democracy. Of course, these justices do not come to power by themselves, but by nomination from the President with advice and consent of the Senate. Surely, the President and the Senate are democratic?

Unfortunately, Americans don’t actually vote for their President, the Electoral College does. Each state receives a number of electors equal to the size of its delegation to the U.S. Congress (the number of U.S. representatives as determined by the decennial census, plus two electors for the two U.S. senators from the state). However, individuals do not have their votes counted equally because of the malapportionment between the House and Senate. Moreover, electors are not decided by voters either. According to the Constitution, the state governments are supposed to select their electors, but they don’t, they defer to political parties who select electors from their parties. Thus, one an American votes in a presidential election, he is not actually voting for the president, he is voting for a group of electors from a political party (which he may or may not agree with) who may or may not choose to carry out the popular vote. This is why there have been several occasions in American history where individuals who won the popular vote lost the electoral vote. So if American’s don’t vote for their judiciary and don’t really vote for their President, surely, they must vote for their representatives in the legislature?

While Americans do get the opportunity to vote for their elected officials in Congress, their votes are diluted through a variety of means. Congress is a bicameral house that is divided between a Senate and a House of Representatives. Each state gets two Senators who serve six year terms. The House of Representatives, on the other hand, are comprised of individuals who serve two year terms that are elected from electoral districts that are designed based on information acquired from the census that occurs every ten years.

However, don’t think that the two houses are equal, the Senate has the power to confirm judicial appointments, confirm treaties, and initiate impeachment proceedings. Moreover, the Senate is not an accurate representation of the people as a whole since different states have different voting powers. A state as large as Texas gets the same amount of representatives as the state of Rhode Island. Thus, voters in different states have dramatically disproportionate voting power when it comes to the Senate. In the early years of the Republic, the population ratio of the most populated state, Virginia, and the least populated state, Delaware, was 12 to 1. In 2004, that ratio was an incredible 70 to 1 between California and tiny Wyoming. Theoretically, if the twenty-six smallest states held together on all votes, they would control the U.S. Senate, with a total of just under 17 percent of the country’s population. What this means is that the Senate as a political institution is not democratic.

The House of Representatives doesn’t fair well either because elections to the House are not competitive and it is not an accurate representation of the population either. The House has had fewer than sixty truly competitive contests being waged out of 435 in most election years. The House also does not accurately represent the population growth in America. The first House of Representatives had 65 members. With a U.S. population of about 3.9 million, each House member represented approximately 60,000 individuals. By 1860 a larger House of 183 members represented on average about 100,000 people each. After the 1910 census, the size of the House peaked at 435, with each member representing 213,000. Today, each member of the lower house of Congress represents 690,000. That means that the voting power of each citizen for members of the House has become smaller and smaller as time has progressed. Other democracies are far more representative of their population. For example, the average member of Parliament in the 646-member British House of Commons represents 91,000 people. And in France, the average number of the 577-member French National Assembly represents 102,000 people. Thus, a decent argument can be made that even the House of Representatives is not truly representative of the American people, especially since its members only serve two year terms.

Given that two of the three branches of government are not even directly elected by the people and the one branch that is dilutes voting power through a variety of mechanisms, it can hardly be argued that America is a democracy. Defenders of American government will now argue that America was never designed to be a democracy, it was designed to be a republic. Let us evaluate these claims.

 

Political Obstructions to Democracy

 

A republic, as it was defined above, is one where the people do not participate in government directly, but through their representatives. However, it can be argued that Americans do not even have that luxury as a complex system of control has arisen through generations that limit the ability of the average American to choose their representatives. This section will discuss the special interest group obstruction to democracy in America.

The last section ended with a scrutiny of the House, it seems appropriate to begin with that branch of government. As stated above, the House has had fewer than sixty truly competitive contests being waged out of 435 in most election years. Why is that? Is it because most Americans agree on political issues? No, the reason why most elections for House seats are not competitive is because they are designed to be that way due to the corrupt system of redistricting. Political parties redraw district boundaries after each decennial census in order to favor their candidates. The majority of states, forty-two, are redistricted in a partisan fashion, with the largest party in each state legislature holding sway in the process. Thus, instead of the people choosing their House members, the House members now use redistricting to choose their voters. Moreover, incumbents use state funds, i.e. taxes that you and I pay, to preserve their power. They have used their power of appropriations to provide for “permanent campaigns,” thinly disguised as constituency service operations, within their taxpayer-paid offices and personnel retinues. Large staffs (at least nineteen per House member, more with important committee assignments), fixed and mobile offices within the home district, and free and extensive mailings to constituents (called the frank) amount to millions of dollars spent to strengthen each incumbent during every two-year term. Easy access to the electronics and print media by virtue of their position is supplemented by satellite TV offices in Washington provided by their political parties for direct communication with home television stations. In 2004, just to cite one recent election year, incumbent U.S. representatives spent a total of $428 million, compared to just $23 million for all challengers combined - a crushing ratio of 19 to 1. Thus, by redistricting and by use of state funds and technologies, the House has become a markedly undemocratic and unrepresentative institution.

How did political parties become such a dominant force in American politics to such a degree that they can tweak the system to place themselves in perpetual power? The answer lies, indirectly, in the Constitution. Remember how Americans don’t actually vote for the President, instead they vote for electors who vote for the President? Since the electoral college system is a winner take all system and only candidates with the majority of the votes have a chance at winning, pressures are applied throughout the political system to force only two major parties to dominate. This is why throughout American history, usually two parties have dominated the political scene through out the country with third parties at a severe disadvantage at ever winning election. The most a third party can do is to damage one of the two dominant parties. Compounding this problem is the fact that since states have been subverted by political parties, they have influenced the very process by which electors are chosen. As was stated above, the overwhelming majority of states choose electors simply by allowing the political party to pick their electors. Thus, the electoral college indirectly forces only two parties to effectively contest a Presidential election. The competition for the Presidential seat becomes fought at every level of American governance from the local to state to various branches of Government. Political parties redistrict their zones for House elections in order to maximize their ability to acquire electors in the Presidential election.

The manner in which members of the House redesign their districts to pick their voters and the manner in which electors are chosen could not be possible without political parties who provide the means to effectuate these practices. However, political parties go even further than this: they actually choose our presidential candidates. They do so by hosting primaries and caucuses. Presidential primaries involve voters casting their ballots either for delegates directly or for their preferred candidate, who is then awarded delegates based on the vote. In a caucus-convention system, in contrast, the state parties hold a series of local meetings at which citizens who attend the meetings indicate their preference for the party’s candidates and select delegates to attend the next level of meetings up to the state convention. National convention delegates are then elected at a state or congressional district convention. These two institutions, while intended to be more democratic, take away the power of average citizens to decide who Presidential candidates to be. Primary elections occur in 41 states now, yet only a small percentage of the actual population participates in them. For example, in the 2000 election, a supposedly highly competitive election, only 17.7% percent of the adult population turned out to vote in all primaries and caucuses, in both parties and all states combined. To make matters worse, in a phenomenon called front-loading, a majority of states are rushing to the start of the calendar, in order to maximize their impact on the choice of the party nominees. This creates a “steamroller” or “sling shot effect” where the winner of the first primary wins the second, third, and entire nomination simply because of the big momentum generated off the first victory. The primaries scheduled later in the calendar become pro forma events, with low voter turnout, and little media attention. To add insult to injury, the already-crowned candidates often do not even show up to campaign. Thus, the states with the first primaries and caucuses exercise tremendous influence on the presidential selection process. Together, Iowa and New Hampshire comprise a mere 1.4 percent of the U.S. population, and about 40 percent of their residents are rural - double the national proportion. Their average African American plus Hispanic/Latino populations is 3.6 percent, while the nation as a whole is 24.6 percent minority. Yet they dominate the Presidential selection process. The primary elections and caucuses are followed up by the national convention, but these two, are not accurate representations of the country as a whole. In practice, modern conventions have stopped being a mechanism for selecting the party’s nominee and become a showcase for the party’s presidential candidate. Because national coverage of the conventions allows candidates to present themselves and their major campaign themes to viewers virtually unchallenged, the nominee’s supporters script the party convention to control the party’s image with the attentive electorate. Debates regarded by party insiders as divisive or overly technical are relegated to nontelevised times; speakers who appear in prime time are carefully selected and coached to emphasize particular themes. Thus, the average American does not even really select nor elect Presidential candidates nor do they truly elect their candidates for the House of Representatives.

The electoral college produced this partisan conflict which in turn, exaggerated another problem: the influence of wealthy individuals and businesses on the political system.

Economic Obstructions to Democracy

The competitive nature of partisan conflict requires a huge demand for capital, which in turn, enables wealthy individuals and businesses to influence the political system. In order for members of the House to retain their stranglehold on the design of districts and for political parties to promote their candidates, a huge amount of funding is required. Wealthy individuals and businesses are more than happy to oblige so long as their interests are represented.

Financial elites and corporations have acquired the ability to influence our political system through a variety of means including, but not limited to: (a) campaign contributions, (b) lobbying, (c) media control, (d) think tanks, (e) charity to academic institutions, and (f) direct participation.

Campaign Contributions. One of the most obvious ways that financial elites influence political processes is through campaign contributions. There seems to be some empirical evidence that corporations actually benefit from their campaign contributions. A study by Michael Cooper, Huseyin Gulen, and Alexei v. Ovtchinnikov entitled Corporate Political Contributions and Stock Returns surveyed contributions to Congressional candidates from 1979 to 2004 from corporate political action committees and revealed that those companies which contributed monies to the largest number of Congressional candidates were able to increase the performance of their stocks at an average of 6% per year.

Lobbying. Financial elites exercise influence in politics through lobbying as well. While it is unclear how much funding goes to lobbying, corporations seem to do a better and better job at it going so far as to actually recruiting congressmen to be lobbylists, cutting out many middlemen in the process. In 2006, over 30% of retiring members (both Republicans and Democrats) became lobbyists with starting salaries averaging $500,000. Those who were former chairmen of congressional committees and subcommittees were making up to $2 million a year to influence legislation in their former committees.

Media Control. Corporations also influence public policy by shaping public opinion through control of the media. Through a process of mergers and acquisitions eight corporations ended up controlling most of the U.S. Media by 2006: Disney, AOL-Time Warner, Viacom, General Electric, News Corporation, Yahoo!, Microsoft, and Google. Noam Chomsky in Manufacturing Consent has pointed out that corporate media’s highest priority is the acquisition of profit which can only be achieved through increasing advertising revenues. In order to attain such revenues, corporate media tends to favor the messages that other corporations favor at the risk of journalistic integrity. Chomsky describes a propaganda model that replaces objective presentation of facts with a sensationalist, distorted worldview that undermines democracy in the process.

Think Tanks. Think tanks play a variety of roles ranging from research, policy development, affecting the public discourse through testimony at government hearings and serving as experts in the media. Many of them are funded by private wealthy individuals directly or through charitable foundations established by corporations.

Charity to Academic Institutions. Financial elites also exercise influence by donating monies to academic institutions. For example, in 1998, Exxon embarked on a campaign to find dissenters from scientific findings documenting global climate change. In 2005, they distributed $2.9 million to 39 groups that would raise doubts about climate change. In 2002, Stanford University signed a 10-year deal with them and other energy companies in return for $225 million for a “Global Climate and Energy Project.”

Direct Participation. Sometimes financial elites do not need to engage in subtle tactics to pursue their interest becomes sometimes, they are the government. In 2003, financial disclosure forms revealed that 40 out of 100 senators were millionaires.

Some thinkers argue certain politicians use their positions of power for personal gain. In The Shock Doctrine: The Rise of Disaster Capitalism Naomi Klein devotes an entire chapter to criticize the Bush Administration’s perceived manipulation of its power for the profit of certain elites. She points out that while Dick Cheney sold off some of the stock ($18 million in profit) of Halliburton, the company he had been the CEO of before becoming Vice President, he still kept 189,000 shares and 500,000 unvested options. According to Klein, the company’s stock price rose 300% within three years of the invasion of Iraq due to soaring energy prices and lucrative contracts.

Klein moves on to Donald Rumsfield who, like Cheney, did not sell off all of his shares in various companies upon his appointment and held on to some $95 million in shares while in office. He refused to sell his stock of Gilead Sciences, a company that he used to chair, keeping between $8 million and $39 million in holdings. Gilead held the patent for Tamiflu, a product that was purchased in large quantities at $58 million by the Pentagon in July 2005 with a commitment by the Department of Health and Human Services to purchase up to $1 billion of the drug at a later date. Rumsfield’s stock in the company increased from $7.45 before his inauguration to $67.70 when he resigned, roughly an 807% increase.

Klein quickly scrutinizes the career paths of other public officials. John Ashcroft, the former attorney general, formed the Ashcroft Group, a company that specializes in helping homeland security firms procure federal contracts. Tom Ridge, the first head of the Department of Homeland Security, went on to form Ridge Global for a similar purpose. Rudy Giuliani formed Giuliani Partners four months after 9/11 in order to serve as a crisis consultant.

Klein saves her most scathing criticism for James Baker, who served in a variety of functions under the Reagan and Bush Sr. administrations, when he was appointed as co-chair of the Iraq Study Group in March 2006 by President George W. Bush. She points out that he made a fortune from the government contacts with Saudi Arabia and Kuwait that he acquired during the first Gulf War. He also formed Baker Botts, a law firm that represents the Saudi royal family, Halliburton, and Gazprom (Russia’s largest oil company). Lastly, he became an equity partner in the Carlyle Company which allegedly made $6.6 billion from the war on Iraq due to contracts for its robotic systems, defense communications systems, and its subsidiary training police. The Carlyle Company was one of many companies to submit a 65 page business plan to the government of Kuwait entitled “Proposal to Assist the Government of Kuwait in Protecting and Realizing Claims Against Iraq.” The proposal, submitted two months after Baker’s appointment, offered the corporation’s high-level political connections to collect $27 billion in unpaid debts to Kuwait stemming from Saddam’s invasion of Kuwait as long as the Kuwaitis invested $1 billion with the Carlyle Group. When the deal was exposed in the media, the companies withdrew the proposal.

Perhaps the most direct manner in which financial elites influence our government is in the area of regime change. The U.S. government has participated in 14 regime changes, many of which were influenced by private individuals seeking to secure their economic interest. In 1898, the Hawaiian monarchy was overthrown and incorporated into the U.S. at the behest of sugar plantation owners who sought to escape tariffs and offered the military a base at Pearl Harbor (without consulting the local government). In 1909, President Howard Taft ordered the overthrow of the popular president of Nicaragua, Jose Santos Zelaya, in order to prevent him from nationalizing several American companies. In 1953, Secretary of State John Foster Dulles ordered a coup against the populist leader of Iran in order to protect the interests of American oil companies. In 2000, the Bush administration based its invasion of Iraq on three grounds: alleging ties to al-Qaeda (which was proven false), to stop Iraq from acquiring weapons of mass destruction (Iraq had none), and to democratize the region (which seems to have backfired). Both Kinzer and Klein argued that real motivation behind the war on Iraq was to protect U.S. energy companies since Saddam was beginning to open up Iraqi oil to non-Anglo-American companies. The consequences of the debacle in Iraq are important for not only Iraqis and Americans, but for the region and the world as well. A classified National Intelligence Estimate report entitled “Trends in Global Terrorism: Implications for the United States” revealed that the war on Iraq contributed to a significant increase in the number of terrorist groups in the world.

 

Conclusion

The structural design of the Constitution, the rise of partisanship and its dependency on funding has indirectly produced a political system where Americans not only do not participate in their government in a direct manner but do not even truly select or elect their representatives. All of this leads to the undeniable conclusion that America is neither a democracy nor a republic but more closer to a plutocratic system of government dominated by political and financial elites.

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