How the system is undemocratic

As the Occupy movement in London (and elsewhere), discusses next steps, it is as well to restate some basics about the extremely limited democracy we live under and what the alternatives might be.

Much of the debate in Occupy is bogged down around whether the consensus model of decision making is appropriate. Some suggest that the consensus approach is time-consuming and actually prevents or delays steps towards concrete action.

Some who defend consensus do so on the grounds that it is more inclusive than majority voting and that this is the way the movement demonstrates that it is different and more democratic than the prevailing political system.

Others extend the argument to imply that the general assembly/consensus model could if replicated somehow transform the way society as a whole goes forward and governs itself.

There is a danger, however, of missing the wood for the trees. The essence of why the contemporary social economic and political system – aka capitalism – is a shadow of democracy is not primarily the result of the way decisions are made.

Process is, of course, an issue. Most decisions are made behind closed doors and the voting system in Britain ensures that minority voices and interests are firmly excluded. But even if there were some improvements in these areas, the system would remain undemocratic.

Why? Because the system of state power is exercised primarily on behalf of dominant economic and financial interests in society. We have seen from bank bail-outs to cuts in corporation tax what these interests are.

A system compelled by law to pursue year-on-year increases in shareholder value above all else is inherently undemocratic because these interests do not (and can never) coincide with those of society as a whole. Moreover, the globalisation process has intensified this contradiction. Getting on for half of all shares on the London stock exchange are held by overseas investors, putting them further out of reach.

Social interests like decent, affordable housing, well-paid jobs, proper health care and a broad education are wider than those of shareholders. Yet the majority are excluded from economic decision-making activity. The first most people learn about job losses or cuts to services, for example, is when they are already a fait accompli.

In any case, a market-driven economy cannot possibly be democratic because interaction between the most powerful forces – hedge funds, bond dealers, handful of corporations in each sector, major investment banks etc – always decide the outcomes. Ordinary people are once again excluded. Their fates are decided on their behalf.

The political system is equally undemocratic because it accepts and encourages this status quo of minority rule. Political institutions are as much tied into the shareholder syndrome as the corporations and financial institutions. They depend on each other. Deregulation was carried through by the political system at the behest of the corporations, for example.

A politics that privileges narrow interests while claiming to rule on behalf of everyone is dishonest, undemocratic, essentially unaccountable. The system as a whole is beyond reform because of the symbiotic relationship between corporate and political power. It’s not a matter of choice but of historical necessity. Capitalism actually rules through state politics; corporate clout would be of little import if it had no political expression.

Creating a real democracy that reflects social interests can only come through a transition to a new economic and political framework. General Assemblies and the assembly process are at the heart of the movement towards this goal.

A fresh constitutional settlement that embraces democratic institutions, new forms of co-ownership, decentralised community power and a range of social rights would for the first time give power to ordinary people. How to achieve this change ought to figure high on Occupy’s agenda.

Paul Feldman
Communications editor

Obama and corporate America

Barack Obama will make history as the first African-American to challenge for the White House. But will the Democratic Party’s nominee for US president have an equally historic impact on the military and corporate power structures that are viewed by many as the country’s shadow government? Indeed, would he want to? All the indications say not.

Obama is riding a wave of attacks on the Bush presidency, for its invasion of Iraq, for its indifference to the fate of ordinary people (as shown in New Orleans after Hurricane Katrina), for creating deeper and deeper inequalities and for taking America to the brink of presidential dictatorship by riding roughshod over constitutional rights.

But the Bush gang have always fronted for powerful corporate, financial and military interests and these are not leaving the scene anytime soon. Moreover, these elites are in some disarray as their world of free-market globalised capitalism falls apart around their feet. They will want an Obama presidency to come to their aid. On that score, they are likely to be disappointed simply because the White House doesn’t have that sort of power over the economy.

Danny Schecter, whose News Dissector website has played a major role in exposing the deceptions behind the selling of mortgages to people who could never really afford them (as well as the lies behind the invasion of Iraq), is not joining in the Obama-rides-to-the-rescue hullabaloo that is gripping the media on both sides of the Atlantic. Schechter cites the credit crisis as a reason for caution. At least one million families have lost their homes. Another two and half million are threatened. But the US political system has no plan for the crisis. In Schechter’s view not only do they have no “fix” – there may not be one because what’s involved is a structural crisis of American capitalism in an era of waning empire. “Many of the proposals being debated are tinkering with deeply flawed policies. They aim to bail the water out of the Titanic while it is sinking,” he adds.

Chris Hedges, a Pulitzer prize-winning reporter, who has just written a book about America’s Christian right, whose adherents will no doubt will be burning fiery crosses at the very thought of a black man becoming president, says bluntly: “The corporate state is our shadow government.” Candidates who promote corporate interests get corporate money. He writes: “Barack Obama's campaign message, filled with lofty promises of change and hope, is also filled with repeated reassurances to the corporate elite. Pick up a copy of Obama's book ‘The Audacity of Hope’. The subtext is clear. It is a steady reminder to corporate America, a reminder bolstered by Obama's voting record, that corporations would have nothing to fear from an Obama presidency.”

As a result, the same corporate donors, lobbyists, weapons manufacturers, nuclear power companies and Wall Street interests that give Hillary Clinton and Republican John McCain money, give Obama money. “They happen, in fact, to give Obama more. And the corporate state, which is carrying out a coup d'état in slow motion, believes it will prosper in Obama's hands. If not, he would not be a viable candidate.”

So both in Britain and America, the economic and financial elites are in a bind. Having captured the state, they find the state doesn’t command the power it once had as a consequence of the same corporate-driven globalisation process that produced a hands-off, deregulation approach. On the other side, the democratic credentials of the state are approaching vanishing point. The result is an increasingly dangerous power vacuum, into which Obama in America (and Cameron in Britain) is preparing to step. Beneath them, however, is a powder keg of discontent, disillusionment and hardship which they will be beyond their control. Then it won't be a case of "Yes we can", as the Obama slogan goes, but "No we can't".

Paul Feldman AWTW
communications editor

When corporations rule the world

Google’s owners are not the only ones troubled by Microsoft’s unsolicited bid for rival search engine Yahoo. No less than the right-leaning, pro-business Daily Telegraph believes that Microsoft’s move is yet further evidence that corporations have become more powerful than governments. The Telegraph has discovered what many have known for a long time – that corporate-driven globalisation is at odds with what are considered to be the norms of a parliamentary democratic state.

Microsoft is a case in point. The corporation has a virtual monopoly on the software used to run personal computers. And it wields tremendous influence in government circles, including in Britain. Microsoft is tied into the New Labour government’s educational policies and practice, for example, and chief executive Bill Gates is close to prime minister Brown, as he was to his predecessor. Bids by the US and the European Union to weaken Microsoft’s monopoly have come to nothing.

For the Telegraph, this is all too much. Its editorial (2 February) concluded that Microsoft’s decision to offer to buy Yahoo shares at 62% over their closing price was essentially aimed at Google. Yahoo has lost out to its search engine rival and the company’s revenues are in decline. The paper is concerned that If Microsoft and Yahoo combine successfully then the future of internet technology will be dominated by a battle between Microsoft-Yahoo and Google, adding sardonically: “So much for the diversity of the free market.”

The conservative newspaper has clearly had its faith in capitalism shaken by the current financial crisis, because the editorial goes on to say: “A Microsoft-Google duopoly, meanwhile, is more subtly political: it brings us close to a world in which corporations wield more power than governments. In both cases, massive issues of sovereignty and commercial freedom are being decided not in parliaments but in boardroom negotiations. The West's elected politicians have some serious catching up to do.”

This is where the Telegraph has missed the point, however. The “West’s politicians” are deeply embroiled in the whole process of corporate-driven globalisation. They have willingly bowed to the power of the corporations in order to attract foreign investment. Politicians have given vast powers to the World Trade Organisation and the EU to promote deregulation and open markets. New Labour has brought business figures like banker David Freud into government. Freud has just proposed that millions of people should be denied invalidity benefit and compelled to work. What a surprise.


The transition from the welfare state to the market state we now live under, actually began under the Tories in the early 1980s and has been completed by New Labour. The Telegraph may be alarmed now, but it was complicit during this lengthy process. The paper embraced the alleged benefits of the free market economy when it seemed to be in the ascendancy. Now it is concerned that growing inequalities and instability will lead the public to question the legitimacy of the capitalist system as a whole.

The Telegraph is right to be worried. The parliamentary state is clearly incompatible with corporate-led globalisation and that is why it becomes more authoritarian with each passing day. In just one week, the state under New Labour has announced the reintroduction of arbitrary stop and search powers for the police and effective detention without trial for terror suspects. Even its own MPs are not safe from police bugging operations. Taking on corporate power will mean building a new, democratic state that supports the transfer of shareholder ownership into common, co-ownership by workers and producers. Now that’s a project the Telegraph won’t be too keen about!

Paul Feldman
AWTW communications editor

Set fair for hot air in Brighton

The TUC Congress in Brighton this week will hear some angry words and even some heartfelt speeches on the themes of vulnerable workers, trade union rights (or the lack of them), poverty, social housing, casualisation, employment rights, globalisation and other issues. But everyone knows that the words spoken at Congress carry little weight and hardly any influence anywhere. The TUC, far from taking any action against globalisation (and its consequences of poverty, grotesque inequality and privatisation) has ended up as an accessory to the fact.

They have sat back and watched the organisation created by the unions over 100 years ago being transformed into the primary party of corporate interests in the UK. Yet still the union leaders go on pleading with Gordon Brown as if he simply had to be shown the right path. In fact, TUC leaders are pinning all their hopes on the Brown government, even though the prime minister is the main architect of the capitalist policies that they formally oppose.

So Tony Woodley, joint general secretary of Unite, can write in his union journal: “Gordon Brown has shown over the last couple of months that it is possible for Labour to leave behind the increasingly-dismal Blair years and start to forge a new course in office.” He claims to see signs of a new approach, of “a more independent foreign policy, the new commitment to house-building and the calm handling of the attempted bombings in early July”. Which planet does Woodley live on? Is he talking about the same Brown who has reinforced market-driven policies on every occasion, threatened more anti-terror laws, praised the Bush regime, imposed below-inflation pay awards on unions and brought Tories and others into the government?.

Brown, who is due to make a speech to Congress today, will be greatly encouraged by such a feeble, bankrupt perspective, shared by most of the TUC. He wants to reduce even further the influence of the unions and constituency members in the Labour Party, and won’t pay any attention to the lobby by the unions of Parliament in support of the Trade Union Freedom Bill next month. Brown is planning to abolish the right of conference to vote against the government on policy, and to refer controversial issues to the National Policy Forum. As Seamus Milne in a comment piece for The Guardian, put it, “Brown’s proposals would mean the final relegation of their [the unions] federal role to lobbyists-cum-cash cow”.

Brown’s government will also be working hard to head off the possibility that the TUC might vote for a referendum on the question of the new EU treaty. Brown, like Blair, does not want his plans challenged by decisions of his own party or even by results of referenda that could interfere with his vision of Britain as a driving force for the global market economy. That is what this government is about, and his fine phrases about a New Politics, citizens juries, dialogue with the people, participation politics, conviction politics etc, are simply a smokescreen for this agenda.

The class struggle, meanwhile, broke surface, spectacularly, last week, when London Underground workers held a strike in defence of jobs, pay and pensions after Metronet, the private company set up in the wake of Brown’s privatisation policies, collapsed. The workers, members of the RMT, and their leader Bob Crow came face to face with the wrath of the Tory media as well as Brown and Mayor Livingstone. The TUC, as usual, was silent. In truth, union leaders with some honourable exceptions, have nothing to say and no leadership to offer. By going cap-in-hand to Brown, they add insult to injury to their loyal, hard-working members who pay their subscriptions as well as the wages of the privileged bureaucrats whose hot air will dominate proceedings in Brighton.

Peter Arkell

The inequality indictment

If you wanted evidence to draw up an indictment of corporate power and the global market economy, you need look no further than the reports on inequality in Britain published today by the Joseph Rowntree Foundation (JRF). While you’re about it, there is plenty of material for a charge sheet against successive governments as well. In the dog-eat-dog globalised market economy, the story is a simple one: the rich have obviously got a lot richer and the average worker has got relatively poorer. Another group – they used to be called the “poor” but are now officially known as “socially excluded” – have grown in numbers. The JRF findings do not delve into socio-economic causes. But their conclusions speak for themselves because the period studied – 1968 to 2005 – coincides with the contemporary globalisation period. During these decades, successive Tory and New Labour governments have facilitated the accumulation of private wealth on a grand scale. The deregulation of capital and finance has enabled City traders, merchant bankers, industrial and financial capitalists to amass wealth on an unprecedented scale at the expense of ordinary working people.

The JRF research , which uses new ways of comparing poverty and wealth trends across Britain, reveals inequality to be at a 40-year high. Researchers discovered that households in already-wealthy areas have tended to become disproportionately wealthier and that many rich people live in areas segregated from the rest of society. At the same time, more households have become poor over the last 15 years. The widening gap between rich and poor has meant that “average” households (neither poor nor wealthy) have been decreasing in number. Danny Dorling, who led the research, said: “Most interesting and certainly unexpected when this work began is the geography of those households who are neither rich nor poor. Over time it has become clear that there is less and less room in the south for them; they have either moved elsewhere, or become poor.” A second report studies people’s attitudes to inequality. It found that over the last 20 years, a large and enduring majority of people have considered the gap between high and low incomes too large.

Britain over the last few decades has become a low-wage, long hours, exploitative, debt-ridden society as far as the majority is concerned. New Labour has speeded this process along, as did the Tories before them. In place of decent wages, there are tax credits so that the employers are not put under any pressure. In place of strong trade unions, there are organisations enfeebled by anti-union laws and weak leaders who are frightened by globalisation and corporate power. While most people reject gross inequalities, there is no one in parliament to represent their views. The state has abandoned its mediating role between class interests and in the period covered by the JRF research has become partisans of big business interests. Overturning inequality will require a comprehensive remaking of the state and a democratisation of ownership of economic and financial resources. That takes us way beyond the wretched New Labour outfit and what passes for democracy in Britain today.

Paul Feldman, communications editor