CH 15 Political Economy and The Struggle For Democracy

CHAPTER XV
Cult of the Rich

Political Economy and the Struggle for Democracy
The Struggle for Control of Society
The Never-Ending Struggle

ost types of societies produce goods and services beyond that needed to meet daily
M needs. This is called surplus production and exists in almost all societies more
complex than hunting and gathering societies. The problem for most societies is the distribution of
this surplus. Should the more skilled or perhaps the more hardworking members of society get more,
and if so, how much? Should the more powerful members of the society get more and if so how
much? Because societies are social systems that have negotiations among their various human
members, who gets what is a matter determined by the form and intensity of these negotiations.
Previously, we have introduced and discussed a theory of societal organization that suggests strong
influences of technology on societal organization. As technology changes it either gives the old
rulers enhanced power or major opportunities to other persons who take control of the new
technology. If a new class increases its power through greater control of the technology it can
eventual shape the arrangement of societal social structures to more nearly meet its needs. In turn
control of these social structures leads to influence on the culture. In general these forms of
influence produce a culture that justifies (legitimates) the control of the social structure and
technology. Needless-to-say, the more powerful and wealthy members of society tend in the long-
term to have their influence in society legitimated by the culture. We have already noted this process
by observing that the upper classes of agrarian societies tend to seek religious legitimations of their
rule such as the idea of the divine right of kings to rule as they please. Again, we observed the same
basic phenomenon in the emphasis given in industrial societies to the supposed advantages to the
average person of consumption. This idea, of course, is one promoted by the business dominated
upper classes of industrial societies.
The Bolshevik Revolution in Russia in 1917 set off an interesting phase in the struggle for
control of society. Its proponents saw it as a means of restoring fairness and justice to the political
economy of the society. The so-called Communists took over Russia and under the eventual control
of Joseph Stalin, it became a totalitarian state. The goal of the revolution was to liberate the people
from the control of the capitalist upper class and install a worker directed government. This
government would eventually phase in a communist way of life where everyone received just what
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CULT of the RICH 321
they needed. However, it was not just Stalins dictatorship that destroyed this dream. In every such
struggle there is the potential for those who are supposedly reshaping the organization of the society
toward greater equality and justice to set this goal aside in favor of improving their own
circumstances. Hence, after a few decades of the new Soviet Union, it was clear that a new upper
class had arrived. This was not a capitalist class for which wealth produced power. Rather, it was
a class originating in the government and the military that was based upon power that eventually
decided to seek wealth. The same thing happened to the Chinese Communist Revolution (attaining
control of China in 1949), as it eventually came to serve those who took power. The eventual
collapse in 1991 of the Soviet Union (the Russian dominated empire largely built by Stalin) has lead
over time to the rise of a new capitalist class. This did not last for long though as the government
of the new Russian Federation soon led an attack on that class through the efforts of Vladimir Putin.
In Russia and the other members of the former Soviet Union, the struggle for control continues. In
China the government (through its control of the military) has kept strong control of the society.
Nevertheless, it has at the same time encouraged not only market economics, but also considerable
capitalist development as well. Will this empowerment of a business class eventually lead China
to undo its own revolution and return the country to even greater inequality than it has now?
The only thing that is sure is that the struggle for control will never cease. Favorable
accommodations between opponents may eventually be found in all these countries including the
U.S., but societies will never be without the threat of a major shift in control. It is likely that the
struggle for fairness and justice is forever ongoing.
It is not very difficult for outsiders to see how the average person was manipulated in the
former Soviet Union. However, many Americans would have much more difficulty grasping how
the struggle for power in the United States has played out.
The New Deal and the Swing of the Pendulum in the U.S.
Life in any technologically advanced society does not exist without struggle for position
within the political economy. As much as we may just want to get on with our lives and deal with
our personal struggles, what happens in the political economy greatly influences the quality of that
personal life. This was very evident in the U.S. during the Great Depression beginning in 1929.
With no effective regulations on investments, investors became increasingly exuberant about the
returns they could get on investments made by borrowing money. These overly opportunistic
investments created an ever increasing bubble in the stock market--at least until it burst. The
resulting downward spiral of decreasing stock prices, decreased production, and layoffs produced
an overall tremendous decrease in the quality of almost everyones life. After several years of
increasing deterioration of the economy the election of Franklin D. Roosevelt eventually lead to
programs to counter these trends. These New Deal programs, as Roosevelt called them, included
Social Security (insuring a minimum retirement income and other protections). The New Deal also
included programs directed at workers. There was the National Labor Relations Act (right to form
unions and bargain collectively), The Fair Labor Standards Act (creating a minimum wage and
regulations on hours of work), and the Works Progress Administration (emergency Government
provided jobs for persons who could not find work). These programs, aimed at people, greatly
improved the circumstances of the average person. Nevertheless, it took the war spending and
322 CULT of the RICH
government control of the economy caused by World War II to finally pull the country out of the
Great Depression.
Many of the New Deal programs were aimed at reform not just relief. Reform of investment
regulatory law and banking were attempts to make sure that an investment bubble like that leading
to the Great Depression would never be possible again. In the factors leading to the Great
Depression and the responses to them through the New Deal programs and laws, we can see the
struggle that pervades every technologically advanced society. As we have previously noted, wealth
produces political power and political power in turn produces wealth. The wealthy hope to use their
wealth and power to gain more wealth. Yet, they are particularly afraid that in a democracy they will
be outvoted by large numbers of poor people who would demand laws to redistribute the wealth of
the more fortunate to persons with little wealth. Thus, even though having the conditions to make
more wealth is very important to the wealthy, their greatest concern has been protecting what they
already have. Consequently, the wealthy aggressively fight infringements on their wealth. They
wish to avoid higher taxes, the rights of laborers to organize, regulations on business (including
investments), and entitlement programs for the average person such as social security or health care
that must be paid through taxes. On the other hand, many workers struggle for all of the above in
order to improve their quality of life.
Before the Great Depression, the wealthy were more influential within the political economy
of the nation and derived great benefits from that influence. However, the crisis of the Great
Depression gave President Roosevelt an opportunity to reshape the political economy to a
considerable degree. The need to organize the country in order to be successful in the Second World
War led to even further changes that aided the average person and hurt the rich. Indeed, the highest
bracket for income tax actually rose to 94% during the war and was still 91% in the Republican
Eisenhower Administration about a decade later . Not just the wealthy, but most people today would
consider this level to be excessive. Nevertheless, the New Deal and war related changes were of
significant advantage to the average person. The two decades after WWII saw incomes
approximately double for most persons and there proportion of the national wealth increase which
meant automatically that the proportion held by rich deceased. The wealthy could have looked at
these changes as a means both to a more fair distribution of wealth within society and a way to
promote greater overall political stability. After all, if the majority of a society is moderately well
off economically, they will hesitate to become involved in radical political change, including
possible revolution. Such stability would insure that the wealthy would retain most of their wealth.
This was the thinking of Otto von Bismark when he established old-age pensions, unemployment
insurance, and national health care in Germany in the 1880s. He thought that providing some
minimum quality of life for the average person would create loyalty to the rule of the Kaiser.
However, in the U.S. after the establishment of the New Deal, the wealthy tended to focus on
increasing their wealth and taking their chances with political stability. Thus, ever since the end of
World War II, much of corporate America has concentrated on undoing the New Deal.
Planning a Comeback
Is it the case that the citizens of other democracies have more power to negotiate the
organization of an economy and social services that improve their quality of life than Americans?
Is there even enough left of the structure American democracy to be justified in calling it a
democracy?
Elliot Cohen and Bruce Fraser argue in The Last Days of Democracy (2007), that democracy
in America has been severely curtailed, but not by accident.
The beauty of utilizing the media to promote market-friendly totalitarianism is that one
avoids the messiness of imposing ones will with a stick. Get the people to choose their
servitude, to give away their rights, and you secure your objectives with much less effort and
much greater control over the results. From a business perspective, dismantling the welfare
state through stealth and deceit is the clear winner in a cost-benefit analysis.
During the decades following FDRs New Deal, business advocates were thinking
along these lines and making their views public. In 1971, the wealthy corporate lawyer and
soon-to-be Supreme Court justice Lewis Powell circulated a memorandum that . . . . argued
that the system of free enterprise in America was being undermined by four institutions,
namely, the courts, the political establishment, colleges and universities, and the media. In
response, Powell asserted, the business community should put its resources and expertise
to work in an effort to dominate these institutions (2007:150-151).
Cohen and Fraser continue with the following summary of the Powell plan written by David Brock,
founder of Media Matters for America.
Powell . . . laid out the strategy that the Right would follow in the coming decades, whereby
conservative business interests would create and underwrite a movement to front its
agenda in the media. Under Powells plan, heavily subsidized scholars, writers, and
thinkers speaking for the movement would press for balance and equal time to
penetrate the media, thereby shaping news coverage, reframing [sic] issues, influencing the
views of political elites, and changing mass public opinion. These would be the
manufactured intellectuals . . . marketed in the media to expand the spectrum. They
would be housed in new national organizations in an effort undertaken long term with
generous financial support (Brock: 2004: 40).
This was definitely a farsighted and effective plan which has been fully implemented over the years.
The movement has developed with considerable business funding. Intellectuals advocating the
causes of the movement have been heavily subsidized including positions in well funded think-tanks.
Of course, there needs to be a counter voice to liberal thought, but when it is heavily subsidized,
objectivity and intellectual honesty can be casualties. Balance and equal time have been
attained, yet by themselves are ridiculous. If some organization had enough money to create balance
and equal time for the idea that the tooth-fairy was making our children lazy by expecting something
for nothing, should such nonsense become a part of our news? The news is not about taking data,
incidents, and stories and making them fit an ideology, but of the search for the truth of what has
happened even if it causes one to re-think ones most cherished assumptions.
We have previously noted, that huge for-profit transnational corporations control all the
major news outlets except those that do not subsist from advertizing ,such as the Public Broadcasting
Service in the U.S. and the British Broadcasting Corporation in England.1 We also noted that this
creates significant bias in what is deemed to constitute news and the accuracy with which it is
presented to the public.
Percentage of Unionized Wage and Salary Workers

United States Canada
1960 30.4 32.3
1999 13.5 32.6
Source: David Card, Thomas Lemieux, W. Craig Riddell, Unionization and Wage
Inequality: A Comparative Study of the U.S., the U.K., and Canada. (National Bureau
of Economic Research working paper no. 9473, Jan. 2003.
Table 15.1
Undoing the New Deal

In the realm of labor law, the unraveling of the New Deal included the passage of the Taft-
Hartly Act in 1947 and then the Landrum-Griffin Act in 1959.2 These two acts accompanied by a
number of court decisions greatly reduced the ability of unions to go on strike, thus taking significant
power away from the unions. In turn the unions attempted to undo some of these new restrictions
through the proposed Labor Law Reform bill. However, it was defeated in 1978 by massive
corporate lobbying.3 Also, by this time the threat of corporations to shut down American production
facilities and outsource and offshore those jobs removed much of the will of unions to bargain
aggressively. Yet, this did not have to be and did not occur in most other countries. A comparison
of union decline in the U.S. with the general stability of Canadian unions can be seen in Table 15.1.
The politics behind all this maneuvering between the unions and the corporations became
very clear in advance of the 1980 election. Here was another corporate offensive that seemed to have
nothing to do with labor law or even with politics. As a consequence labor unions and the average
American never new what hit them, let alone that they had even been hit. Jack Rasmus makes this
argument in his The War at Home (2006) as he describes the preparations for the ascendency of
Ronald Reagan.
The final political coup de grace was then delivered to the Carter administration.
By late 1979, the decision had been made by the corporate elite to force Carter out. Global
business competition was intensifying once again at the close of the decade and more
aggressive tax and trade policies were being demanded, none of which Carter was capable
of delivering.
In 1979-80 the Federal Reserve chairman, Paul Volcker, spokesperson for finance
capital and the banking sector in America, adopted a policy of driving up interest rates well
beyond anything justified by general economic conditions. Volckers efforts had the
intended result. Inflation and interest rates fed off each other in the short run, driving both
to levels to 15% and more by early 1980, an election year. What quickly followed on the
eve of the November elections was the sharpest drop in the economy, more than 4%, up to
that point in the postwar period. Even a steeper and more rapid recession than that of 1973-
75. Volcker handed Reagan his number one campaign slogan, the first cue card for the
1980 election campaign: Are you better off today than before the current (Carter)
administration took office!. It all but ensured Reagans election that year.4
Rasmus interpretation of Volckers actions may be much too conspiratorial. Cassidy (2009)
suggests that Volcker had vowed to ring the last bit of inflation from the economy. He followed the
ideas of the extremist free market economists like Milton Friedman and other members of the
Chicago School by restricting the money supply. Unfortunately, this did not work, as Friedman
came later to understand and to admit publically in 2003. Instead of doing away with inflation
Volckers actions plunged the economy into a deep recession, which is precisely what happens in
mainstream Keynesian (a competitory to free market theories) models when the money supply is
drastically reduced. Short-term interest rates jumped from 10 percent to 19 percent. The
unemployment rate jumped to 9.5 percentwhich was then its highest since the Great Depression.5
Whether Volckers actions were part of corporate pressure to get rid of Jimmy Carter as Rasmus
intimates or were simply driven by extremist free market economics, the result was very bad news
for President Carters bid for a second term.
Of course, the Reagan victory in 1980 cleared the way for continuing corporate advances in
areas besides labor law. The ongoing shift of the tax burden to the average person was further
accelerated by the legislation promoting the Reagan Tax Revolution. The overall shift since World
War II has been from the upper class and corporations to the average person. As can be seen in
Table 15.2, since 1944 Corporate Income Tax has decreased dramatically as a share of all total
Federal tax revenues while the share made up of payroll taxes has dramatically increased.
Shares of Total Federal Tax Revenues

by Major Source, 1944-2003
Fiscal Year Income Tax Corporate Income Tax Payroll Tax
1944 45.0% 33.9% 7.9%
1948 46.5 23.3 9.0
1960 44.6 23.2 15.9
1964 43.2 20.9 19.5
1972 45.7 15.5 25.4
1977 44.3 14.4 29.9
1980 47.2 12.5 30.5
1988 44.1 10.4 36.8
1992 43.6 9.2 37.9
2003 44.5 7.4 40.0
Source: Budget of the U.S. government, 2005, Historical Tables, GPO, 2004.
Table 15.2
The great shift of the tax burden of the nation to the average person can be even more
clearly seen in Table 15.3. This table adds together the burden of Federal Income Tax and
Payroll Tax creating an overall (effective) tax rate. The column for Median Family Effective Tax
Rate is the rate paid by a family in the middle of the population. That is, half of all families have
a lower rate and half of all families have a higher rate than the rate shown in this column. This
effective tax rate for the average family has greatly increased since 1948 while the rate for
families among the top 1% of tax payers has greatly decreased.
The Shifting Federal Tax burden, 1948-2003

Year M edian Family Effective Federal Top 1% Family Effective Federal
Tax Rate (Income & Payroll Tax) Tax Rate (Income & Payroll Tax)
1948 5.3% 76.9%
1965 11.5 66.9
1980 23.6 31.7
1988 24.3 26.9
2002 30.3 21.0
Sources: U.S. Treasury, Statistical History of the U.S. 1976; CBO
Table 15.3
Some might argue that the New Deal and WWII policies went too far in taxing the rich.
Nevertheless, the great shift in the tax burden since the 1980s has surely taken the swing of the
pendulum back to being greatly in favor of the rich.
The Great Shift in the American Economy
Transnational Corporations and the World Market

The rise of the world market and transnational corporations have been mutually reinforcing.
Of greatest importance in these developments has been the ease with which these corporations were
able to separate their interests from the interests of the countries of their origin. As transnational,
these business entities now had very little dependence on the economic health of the countries of
their origin. The health of these economies was not irrelevant to these corporations, but no longer
central. These corporations were much freer than in the past from political control. Furthermore,
through the great expansion of their markets and therefore their profits, they had greatly increased
wealth to repulse whatever attempts were made to control them. They were much freer to pursue
their own amoral search for profits which had an impact for better or worse on the entire population
and the entire ecosystem of the planet. The results in the U.S. were increased economic and political
inequality, the decreased ability to address many forms of environmental pollution, and decreased
health of much of the population.
The Shift from Manufacturing to Finance

A shift to finance capitalism may sound like a big yawn to most Americans, but it has had
and will continue to have a profound impact on their daily lives. A funny thing happened on the way
to the information society. As we noted previously in our discussion of the possibility of an
information society, the development of communication and transportation technologies allowed the
creation of a world market in the 1960s and 1970s. As well, we previously discussed how this made
the transnational manufacturing corporation possible. What is important to make clear now is that
these same technological developments were even more important to transnational finance
corporations. Shifting money around the world electronically was much easier than trying to set up
manufacturing plants, research and development labs, and sales offices throughout the world as is
necessary to produce and sell the products that come from manufacturing corporations. Finance
corporations are banks and investment houses that make their money through investing money and
selling investment instruments not through making products. Sometimes investments are made in
manufacturing corporations through the purchase of stocks or shares of a corporation. But this is
seldom done with the idea that the investment company would make great profits because the
manufactured goods would make great profits. Often the investment is made because the stock of
the manufacturing company is likely to go up and that stock could eventually be sold at a profit
rather than held. Often as well, the investment is made to take over a manufacturing company that
is not doing well and then sell it off in bits and pieces. By owning sufficient stock in the floundering
company the investment capitalists can gut the company at a profit. Investment capitalism uses
money to make more money not to make products that will then make money for the company.
The extent of the change from manufacturing to finance is huge. In 1950 manufacturing
made up 29.3 percent of the total U.S. gross domestic product while financial services made up only
10.9 percent. The shift to finance continued very steadily with manufacturing having only 12.0
percent of the gross domestic product by 2005 and financial services rising to 20.4 percent.6
If one is an investment capitalist, this is a fine game that can be very profitable. Yet, as the
investment capitalists in the U.S. became more powerful than the manufacturing capitalists their
influence on the U.S. government surpassed that of the manufacturers as well. They used that
influence in the U.S. and the world as a whole to enhance their ability to make profits producing
nothing and sometimes selling instruments with bogus claims as to their worth and thus in fact worth
nothing.
World Market
The development of a world-wide market contributed greatly to the changes in quality of life
for the majority of Americans since the 1970s. The world market also was very influential in the rise
of finance capitalism. To understand what has happened and why it is important to the development
of finance capitalism, it is necessary to go back to an important era in economic history. After the
Great Depression and WWII, it was clear to most Americans (unlike today) that unregulated markets
not only were disastrous but that properly regulated markets could be very profitable to an entire
nation. The development within economics of Keynesian theory explained how this could be and
thus was used to justify the continued use of command in conjunction with market in the U.S.
economy. Most simply stated Keynesian economics uses government spending to stimulate an
economy to smooth out the cycles that come with market speculation and correction. This, of course,
is combined with proper regulation to keep these cycles from becoming unwarranted speculative
bubbles. Nevertheless, after a few decades the attraction of higher profits from less regulation led
to renewed calls for free markets. The world economy as a whole became a market economy
because there was nothing similar to a world government that could exercise command. Thus,
Keynesian economics did not seem possible at the world level. This, of course, was a situation of
sheer joy for finance capitalists--now free to cut their deals and make their investments essentially
unregulated around the entire globe. The addition of corporate pressure to force local governments
to open their economies to market forces created over the years created great opportunities for
finance capitalists. However, the majority of these opportunities were based upon schemes that led
to bubbles and the recessions that usually followedsomething that had seemed to be only a part of
the past until deregulation brought it back. Yet, besides the bailouts, there were other consequences
of this new international market economy dominated by finance for the U.S., for the average person,
and for the world as a whole.
The Export of Manufacturing

Since there is no effective world level command, then the enforcement of quality standards
on products becomes very difficult. The results of this lack of quality control include tainted
(sometimes deadly) pet food, as well as childrens toys with dangerous amounts of lead in and on
them from China. Included as well are tainted (sometimes deadly) medications produced in India
and China under unsanitary conditions. These are but a few examples of the ineffectiveness of
regulation of products originating outside of the country. Even though the millions of items entering
the U.S. daily could not all be inspected by any regulatory agency, almost none actually are. The
various regulatory agencies in the U.S. have been insufficiently funded and excessively politicized.
The result of this is that even products produced in the U.S. are not adequately regulated. As an
example, U.S. slaughter houses used to be under much greater scrutiny than became the case by near
the end of the twentieth century. Previously there was oversight of meat preparation for public
consumption and the correction of problems before they reached the public. This has shifted to crisis
management. In this latter form of regulation the regulatory agency simply waits for one or more
person(s) to get sick or die from contaminated food and then attempts to trace where the food came
from. If it is fortunate enough to do so quickly and recall the contaminated batches, then fewer
people will die than if it takes longer. Doing its best to act quickly becomes the way to protect the
public. This inept procedure has caused many Americans to think about alternative sources of their
food such as their own gardens or trusted local farmers markets.
Protecting the public may not be the biggest problem in sending manufacturing to other
countries. There are military consequences as well. Decades ago watch making moved out of the
United States. Government officials and the military were gravely concerned about the defense
implications of not being able to manufacture timing devices for the defense of the country. Since
then many more items of great importance such as the manufacture of micro chips and printed circuit
boards have moved principally to the mainland China and Taiwan.
David Cay Johnston provides another example. Strong light weight magnets made with
neodymium were developed in the U.S. with public funds. One of the U.S. companies producing
the magnets--Magnequench a division of General Motors--was then sold to a consortium that was
backed by a Chinese company connected to the Chinese government. Magnequench then purchased
all other manufactures of these magnets in the United States, closed them down, and moved all
manufacturing of these magnets to mainland China. Because of the importance of these magnets to
electronics and to electric motors, the U.S. is now dependent upon China for some of its crucial
military needs. Such acquisitions of U.S. companies by foreigners is supposed to be monitored by
an arm of the government called the Committee on Foreign Investment. However, the Government
Accounting Office reports that such deals are almost never denied.7 It appears that the advantages
to businesses so outweigh the good of the country that the formal mechanisms set up to provide such
oversight are there mainly for appearances.
We are far more interconnected in the world today than when watch making left the United
States. Manufacturing is scatter all over the world. Thus, even though the final assembly of an item
may be done in a single country, the full extent of the production of the item is far more widespread
with China clearly the biggest source. Nevertheless, it still seems as imprudent today to have foreign
production of vital defense materials as it did decades ago with the passing of watch manufacturing
in the United States. To complicate matters further, China will not be content for ever to simply
produce what has been designed and developed in other countries. With a huge cadre of scientists
and engineers and awash in money coming from being the current biggest manufacture of goods for
the U.S. market, the next step is new product development. China has already moved ahead with
its own innovations, as for example in the production of solar cells. This is a development that does
not seem to be of great interest to finance capitalists and thus not surprisingly to the U.S.
government. However, it will likely have significant and negative consequences for the U.S.
economy.
But the biggest loss of all in the shift of American manufacturing jobs to other countries has
been the difficulties this has raised for so many Americans in simply finding work that pays enough
to support them. Although we have plenty of new gadgets to entertain us, the stresses and strains
of everyday life have grown much greater for the average person at the beginning of the 21st century
than for persons living during the middle of the 20th century. No longer do young people routinely
expect to live a materially more comfortable life than their parents. Rather, they are often concerned
about keeping a any job and consequently a place to live. They worry about not having health
insurance which generally only comes with better paying jobs. Also, they wonder how to fund a
pension plan so that they will not have to retire on nothing more than Social Security should that
even be available when they retire. All of this is tremendously stressful and has negative effects on
health and consequently on how long people live.8
The Increase in Consumerism

A major cultural change accompanying the changes in the political economy is the growth
of the culture of consumption and the individualism that it promotes. In this hedonistic culture one
lives to experience life in every way--pleasure is the goal. Entertainment and material acquisition
contribute to such pleasure. Here we return to the dumbest generation that is focused on
entertainment and having things. They, of course, are but the latest iteration of several generations
preceding them in the promotion of this form of meaning in life. As we noted in Chapter I, this
focus does not promote political activism nor even a historical understanding of where the country
has been. Consequently, such persons cannot easily discern when they have been taken advantage
of nor defend themselves should they ever realize what is happening to them.
Transformation of Religion
The Rise of Authoritarian Religion

The corporate upper class movement to take back full control of America did not take place
in a vacuum. It coincided as well with several other changes. For one, there was the tremendous
increase in the influence of authoritarian dominated religious organizations. In the U.S., mainstream
religious denominations have been losing membership since the mid-20th century. At the same time,
at least up until the beginning of the 21st century, fundamentalist organizations like the Southern
Baptist Convention (SBC) gained members. However, at the rise of the 21st century, even the more
established conservatives like the SBC began losing members to megachurches.9 Many of these
large, mostly independent, congregations preach dominionist theologies combined with a prosperity
theology. Such a theology is strongly nationalist and pro-business which fits the needs of the upper
class.
People search for and often they find what they want to hear. Two very important reasons
for the searching comes 1) from the authoritarians need for rules and belonging and 2) trying to cope
with long term severe economic downturn. For authoritarians, the urgency of the search comes from
the disruptions of traditional culture and social structure accelerating in the 1960s, as part of the
movement away from industrial societal organization. The pressures for racial and gender equality
threatened to change the rules and the issue of who constitutes the us to whom the authoritarians
crave to belong. These changes contributed greatly to the religious fundamentalist values
movement in which the push for values was often a code term for maintaining traditional culture
and social structure. At first this was keeping blacks and women in their place and later was more
strongly directed toward homosexuals.
The religiously inspired values movement fulfilled a need of the upper class for more
votes. In a happy coincidence the values voters could slip into bed with the upper class in return
for promises of stacking the Supreme Court in order to do away with legalized abortion and other
values issues. In return the upper class received support for free markets and tax cuts to name
a few of their interests. Yet, these combined voting blocks were not sufficient to win elections.
They still needed to attract some independent voters which they did, for example, in the 2000 and
2004 elections of George W. Bush to the Presidency.
Although race is still very important in elections, it has lost some of its ability to split the
middle and lower status-classes. However, the values split has done some of this same work for
the upper class, thereby contributing significantly to the downturn in the economic quality of life of
the majority of Americans since the 1970s.
Overtime the consequences of this split have become an issue for some of the religious right.
Many feel that they also have a religious duty to the poor and otherwise afflicted such as uninsured
persons with severe illnesses. In some cases this concern may pull them away from their coalition
with the upper class.
American Religious Exceptionalism

The second reason for the search for religious answers beyond the traditional churches has
come from the very significant decrease in the standard of living for many people and their loss of
hope for their economic future. As previously noted, the enormous increase in wealth and income
inequality in the United States has produced levels of inequality much higher than that in any other
of the postindustrial societies of the world.
It is also the case that the level of religiosity in the U.S. is much higher than any other of
these nations as well. This has often been referred to as American Exceptionalism. With a pat on
the back, many of us have congratulated ourselves on this exceptionalism and explained it by our
reliance on free markets. European countries had a history of state religions and the thought has
been that people rebelled against these institutions producing the huge decline in religiosity we find
in these countries. Freedom of religion in the U.S. was equated to a free market for religion. Giving
people their choice in what to believe supposedly allowed greater stability in religious belief.
Consequently, America was a land where religion could flourish. But is this correct?
First of all, as we noted at the beginning of this section on religion, there has been a marked
decline in traditional denominations within the U.S. which has been partially off-set by growth in
megachurches. Nevertheless, in comparison to all other postindustrial societies, the U.S. has a
highly religious population. But, is there another reason for the persistence of religious belief in
America compared to Europe other than more religious freedom?
Gregory Paul has gathered data on Christian religious attitudes for 19 postindustrial
countries. He created a scale from these attitudes ranging from what he called Religious-Creationist
to Secular-Pro-Evolution. He then constructed a graph with this religiosity scale on one axis and a
measure of income inequality on the other. Countries varied along the religiosity axis from very high
in secularism, that is near the Secular-Pro-Evolution, such as Denmark, Japan, and Sweden to very
high in religiosity such as Ireland. But, the most religious of all was the United States. Also, even
though the least unequal in income of the societies were again the same ones as scored high on
secularism, Ireland was somewhat higher in income inequality and the U.S. was by far the highest
of them all. Consequently, Paul argues that with the high degree of economic uncertainty for so
many people in the U.S., religion is often used as a means of getting greater control of ones life.
Paul also created what he called a Successful Societies Scale (SSS). The scale is based upon
scores for levels of homicide, incarceration, youth and adult mortality, suicide, STDs, teen
pregnancy, abortion, fertility, marriage failure, alcohol consumption, corruption, life satisfaction,
per-capita income, income disparity, poverty, work hours, and employment levels.10 The SSS was
constructed as a scale ranging from 0, labeled Dysfunctional to 10, Healthy. Norway scored
highest with an SSS of 8 followed by Denmark, Sweden and Holland, all clustered around 7
indicating that they are fairly healthy societies. These societies were also at or near the extreme
secular end of the attitude scale with 8 and 9 where full Secular-Pro-Evolution was a 10. The other
societies SSS scores decreased down to the 5 and 6 level while scoring 5-7 on the attitude scale
placing them a bit more towards the Secular-Pro-Evolution end of the scale than the Religious-
Creationist end. Although Ireland was about a 5 on the SSS and therefore moderately healthy, it
scored a bit less than 3 on the attitudes scale placing it near the Religious-Creationist end of the
scale. Once again the U.S. had the most extreme scores with a SSS score of only 3, putting it near
the Dysfunctional end of the scale. This low social health score was accompanied by a score of 1
on the attitudes scale putting it clearly at the Religious-Creationist end of the religiosity scale.11
Pauls interpretation is that in societies having great inequality social problems emerge that
are so significant that people turn to hoped for supernatural intervention in managing their lives.
Nevertheless, the data from other sources clearly show religiosity is on the decline in the U.S. and
non-theism on the rise. The decline of religion in the U.S. is simply lagging what has already taken
place in Europe give the much greater inequality in America.
As for the reason for the general decline in religiosity, Paul argues that advances in science
contribute to non-belief. He also contends that consumerism is more appealing than traditional
Christian emphases on living modestly. When people focus on materialism they tend to stray from
traditional religion. Other commentators also suggest that because of the media, people had greater
awareness of religious variation by the later part of the twentieth century. The argument is that as
people learn of so many different and incompatible claims to religious truth, they begin to wonder
if any of them are true.
However, the more religious persons within the U.S. would argue that our problems could
be solved with more religion, of course, meaning their kind of religion. Yet, the data Paul sites
suggest that heavy doses of Christianity are not conducive to decreasing the problems measured in
the Successful Societies Scale. The U.S. shows up last and sometimes very much so compared to
the 19 other post-industrial societies in his study.
A different data set which compares Christians with the general population and with non-
theists shows Christians generally not faring any better than others and sometimes a bit worse such
as their level of wife beating. This is the work of evangelical sociologist Ronald J. Sider author of
The Scandal of the Evangelical Conscience, Why Are Christians Living Just Like the Rest of the
World? It is unwarranted to even suggest that religion is making our problems. Yet, Gregory Paul
is surely correct that religion is a coping mechanism. Nevertheless, it does not seem to be very
affective in changing problems at the societal level. There are exceptions. The slave trade was
largely stopped in the name of religion just as in the U.S. religion had been used to justify slavery.
As we have noted in earlier chapters, there are highly religious persons in the U.S. who are trying
to do something to decrease the great inequality in the country and to alleviate the suffering that it
causes. In his Rich Christians in an Age of Hunger: Moving from Affluence to Generosity, Dr. Sider
has also addressed this side of the issue. The crux of the matter is that religion has not shown itself
as a magic bullet that will solve all our social problems and sometimes it can aggravate those
problems.
Finally, we can say that religion, even though decreasing, is still strong in the U.S., especially
prosperity theology. As well the most loudly heard sects of religion have for many decades tended
to promote a focus on values issues rather than inequality. As well, most of these same sects
promote the possibility of personal economic success if one but has the right attitudes and does the
right things--such as praying for prosperity. Both these emphases are advantageous to the corporate
upper class. Religion can even be of direct support to the upper class through its involvement in
politics.
The Family
Various forms of fundamentalist Christianity took steps in the late twentieth and early
twenty-first centuries to gain political power. One of the most influential and yet outlandish attempts
to gain power came from the movement know as the Family. Started in the 1930s by Norwegian
immigrant Abraham Vereide and most recently headed by Doug Coe, it did not form congregations
but a vast world-wide network of prayer groups. Its theology is Jesus plus nothing. In order to
join the prayer groups of the powerful, one had only to acknowledge acceptance of Jesus without
such acceptance being defined. This led to such bizarre situations as the inclusion of General
Suharto dictator of Indonesia within a prayer group of Christians even though he was a Muslim.
Now Islam does teach that Jesus of Nazareth was a prophet so the inclusion does not seem so
improbable until it is noted that Suharto at the time fiercely put down a rebellion in East Timor at
the cost of many hundreds of thousands of deaths. This certainly leaves the impression that the
theology of Jesus plus nothing lacked a moral dimension. Indeed, the history of this organization
leaves the impression that the mostly religious participants actually cared more about power than
religion. Religion seemed to be a way for Vereide, Coe, and others to gain influence even though
they lacked any of the traditional credentials for doing so.
The Family is very secretive and its only publically displayed event is the yearly National
Prayer Breakfast in Washington, D.C.--formerly the Presidential Prayer Breakfast begun in 1953.
Out-of-view are training houses for young men (mostly college students or recent graduates) to
spread the word and hundreds of small prayer group cells in the U.S. and around the world.
According to Jeff Sharlets The Family: The Secret Fundamentalism at the Heart of American
Power, a very large number of members of Congress and other government officials are members
of the network.
At first glance it might seem that the rich and powerful join these prayer cells for religious
reasons. However, with a near non-existent theology and a theologically diverse body of followers,
it makes more sense to believe that people joined for reasons other than religion. Once this network
began to grow, anyone who did not participate would be left out of the possibility of making many
important connections that could provide valuable information and political and economic favors.
Eventually becoming a very widespread network of power brokers, the Family spread a simplistic
religious ideology of the importance of power and wealth. There are, of course, many Christian
theologians who suggest that the Family had turned the Biblical message on its head. They would
likely say the same thing about the Dominionists who surely found the Familys network of great use
in their attempts to gain power in America. Overall, this vast network has contributed to the shift
of power within the U.S. government toward the political right.
Positive Thinking, the Megachurch, and the Corporation

As positive thinking was on the rise, businessmen/preachers started to use it as a feel good
religion that gave people hope. This we previously noted in Chapter V following the work of
Barbara Ehrenreich in Bright-Sided which we will turn to again here. As good business persons,
these preachers set up their churches like commercial buildings, lacking in religious
symbolismappearing more like public auditoriums. They turned to the business world for
marketing strategies to build their congregations and sales of their church produced books, tapes,
icons, and so forth. They made connections with and did favors for important businessmen whose
endorsement of the preachers was used as evidence by the preachers of their own effectiveness.
But positive thinking had its business corporation uses as well. Motivational speakers were
brought in to teach employees how to succeed on the job. Perhaps, of even greater importance,
positive thinking was provided for persons laid off from a business so they would be less disgruntled.
In the late twentieth century tens of millions of workers lost their jobs to downsizing. Not only were
they in need of skills to find another job, but the corporations that laid them off did not want any
negative repercussions from doing so. Positive thinking motivational speakers and coaches were the
perfect solution. For example, Ehrenreich notes that on the day in 1994 that AT&T announced huge
layoffs it had scheduled its San Francisco branch personnel to be in attendance at a big motivational
event featuring Christian motivational speaker Zig Ziglar. Richard Reeves of the Times seems to
have captured the essence of the speakers message in a single sentence. Its your own fault; dont
blame the system; dont blame the bosswork harder and pray more.12 Dont ask if the U.S. needs
an industrial policy that actually protects its average citizens. No that would be a negative thought
and those are not allowed. It doesnt matter that there are more people seeking jobs than available
jobs, just be positive and pray that you get one of the remaining jobs rather than your neighbor.
The melding of religious experience with corporate experience created a common
atmosphere. People were immersed in a culture that treated them as individuals who were in control
of their lives through the magic of positive thinking. Since they are often taken advantage of by
megachurch millionaires and corporations, this culture is extremely similar to that of a cult.
Is There Democracy Without Results?
Cooling Out the Mark

Every con man knows that fleecing someone is best done is a way that either the victims
dont know what has happened to them or they think something else has happened that they cannot
do anything about. All complex societies have significant inequality with most of it being hidden
or legitimated for the majority of the population. Like good con men the upper class usually takes
some care in how it covers its tracks or how it legitimates its extraction of wealth from the rest of
the society. Indeed, a proportion of such differences in wealth would be seen as legitimate rewards
for hard work or innovation. Nevertheless, when inequality becomes extreme cooling out the mark
becomes a necessitya process very similar in general to the operation of cults as well.
Compared to Other Societies

Compared to other technologically developed countries, the United States has tended to lag
considerably behind in the overall quality of life of its citizens. This has been true for a long time
in comparison to many European countries where health care is provided to everyone and other
safety net type programs have been long available. Such programs include free college education
and adequate vacations. These and other forms of assistance can easily be purchased by the wealthy
but are a struggle for everyone else. With the spread of industrialization and consequent safety nets
to significant portions of Asia and South America, this difference in quality of life has become even
more glaring.
In the first decade of the 21st century the yearly expenditures in the U.S. for social safety net
supports common in other countries programs was about 3 percent of Gross Domestic Product
(GDP). In order for its citizens under normal retirement age to get support similar to what exists in
Canada, the U.S. would have to spend an additional 2.5 percent of its GDP. Trying to match the
services provide in most of Europe would cost about 4 percent more of GDP than is presently spent,
and to provide services similar to the Scandinavian countries would require about 9 percent of GDP.
Previously, we examined the extreme wealth and income inequality in the United States. We
found that the U.S. has the greatest extent of inequality of wealth of all the industrial and post-
industrial nations of Western culture and of many other advanced nations as well. Yet, Americans
consider their country to not only be the origin of modern democracy, as it was, but to still have a
more democratic government than any other country. Yet, if this is true, how can it be that the
quality of life in the U.S. lags so far behind so much of the rest of the world? True, there is still
potential in the U.S. to rise from rags to riches, but that is happening in many other countries as well.
This form of mobility exists where members of a generation improve the quality of their lives
beyond that of their family of origin. Sociologists would call this kind of improvement
intergenerational upward mobility. Yet, this kind of mobility is only one indicator of quality of
life and one on which the U.S. is not doing as well as some other countries. Furthermore, if most
people had a high quality of life to begin with, then moving up would not be such a great thing.
Moving up where people were not doing so well would certainly be more important to most people
than moving up from what was already a reasonably secure life. Yet, more and more Americans are
actually moving downward in terms of intergenerational mobility. They are not doing as well as
their parents. Again, why is there such a tremendous difference between what Americans think of
their democracy and the reality of their everyday lives and the way the rest of the post-industrial
world lives?
The forces employed by the corporate upper class to retract the New Deal programs and fully
take control of the U.S. are very strong. Most Americans do not understand what is happening to
them and consequently have no clue as to how to protect themselves. Like cult members
everywhere, the cultural ideas they accept as reality and would in many cases defend with their lives
are often the vary means to their own oppression. When you ask a Frenchman if a person should
have a right to proper health care for self and family, he will be taken aback. He can hardly imagine
that one could pose such a cruel and inhumane question. Of course, he would answer, everyone
should receive care when they are in ill-health. But ask the same question of an American and the
questioner seems suspect. Why would one ask such a question? The people who deserve healthcare
are the ones who have earned it. Yet, Americans have a shorter life expectancy and a higher Infant
Mortality Rate (number of children born out of every 100,000 who die before reaching age 5) than
most of the technologically developed world.
Great inequality produces many problems. Psychologically these seem to often be
experienced in terms of Fear, Stress, Anxiety, Frustration, Anger, and sometimes Hate. Compared
to most other postindustrial nations it seems as though a majority of the people of the U.S.
experience relatively more of the following fears:
1) Fear of being denied health insurance in the worst health care system overall of all postindustrial
societies (highest cost per insured, lowest proportion of population covered, highest personal
bankruptcy rate for reasons of health, and by overall measure the lowest ranking by the United
Nations of all the post-industrial societies).
2) Fear of loss of employment, and therefore, income and health insurance, consequently many U.S.
workers skip the vacations allowed by their employers for fear of losing their job.
3) Fear of family conflict from economic stress and resulting family breakups.
4) Fear of health problems from job and economic stress.
5) Fear that children will earn less than parents.
In order to cope with these stresses and fears, the citizens of the U.S. have often participated
in the following:
1) New Age practices and religions,

2) Right wing military movements (e.g., militias) [also reassertion of masculinity],
3) Dysfunctional Attempts to build role-identities alternative to those offered by the mainstream
(e.g., street culture which is spreading through all supposed racial categories),
4) Running up high personal debt which unfortunately leads to high rates of bankruptcy,
5) Drug use (largest market for illicit drugs in the world)13 [Largest total prison population (not per
capita) in the world with over 2.29 million prisoners14, many of them for drug use],
6) Highest religiosity of all postindustrial societies, particularly fundamentalism (e.g., Dominionists)
who want theocracy not democracy,
7) High proportion of the population radicalized: believing extreme ideas, making extreme
accusations, taking extreme actions,
All of these coping mechanism either fully or partially interfere with self-governance, that is, with
the ability to protect ones own and ones family interests within the society.
Democracy
The form of government under the U.S. Constitution sets up an organization to facilitate the
participation of the average citizen in the governance of the country and thus that persons life. This
goal of citizen participation is what is meant by democracy and the United States of American was
the first modern democracy. Let us set aside technicalities such as the U.S. actually being a Republic
(constitutional democracy) since such a form of organization would be a form of democracy as it has
been broadly defined here. The essential argument of this entire section is that if a society actually
has a functioning form of democracy, then the middle class would be large and reasonably secure
in its quality of life. That is, if the people actually have a significant voice in a society, then those
who have the education and income to be middle class could use these tools to protect many of their
interests relative to the interests of the rich. Furthermore, the poor would be a much smaller
proportion of the society than we find in the United States. If the majority of people truly had power,
then the resolution of social problems would take a direction that would be desirable to an informed
citizenry of that society. Conversely, if inequality became extreme resulting in numerous problems
not faced in societies of similar technological advancement, then we must conclude that democracy
is not functioning very well in such a society. In other words, it makes no sense to claim significant
input into the functioning of a government by its citizenry and then have the actions taken by the
government strongly favoring other interests such as transnational corporations. Put yet another way,
there cannot be democracy without results favoring the majority while protecting the right of all
minorities not to be exploited by the majority.
It would appear from this reasoning that even though the U.S. pioneered this new form of
government, it has not progressed with it to the degree that most other nations of similar
technological level have. But how could this be?
The Perfect Storm
The Rise of FM Radio and the Internet

As if the above problems were not enough of a burden for the American people, there are a
few more of note which we address here. Taken all together these and the above mention problems
constitute a perfect storm of tribulation making the alleviation of any one of these interrelated
problems much more difficult.
The rise of radio stations using FM signals shifted music away from the AM stations many
of which turned to talk formats to survive. There is a place for news and informed commentary as
PBS radio has shown. However, the success of PBS has been with an audience that on average is
better educated then the general populace and seeks more information rather than emotional support.
Other talk radio formats include the highly successful approach of simplifying arguments to binary
positions with one of them being labeled good and the other evil. By playing to the listeners vanity
as persons in the know and on the side of good, the talk show hosts build an audience who listened
to be stroked and enraged by the extent of the evil they faced. This approach also played upon real
grievances faced by the listeners as the level of inequality greatly increased and people wanted
answers as to how to improve their lives.
As Adolf Hitler observed long ago, hate is much more engaging than mere dislike. The
power of hate oriented talk radio is to further radicalize an already disgruntled population. Critical
thinking is dismissed in favor of loyalty to the uninformed opining of a favorite talk show host. The
consequence is that ones real problems go effectively unaddressed.
The appearance of the Internet gave the increasing numbers of radicalized citizens a way of
both finding each other and of mutually reinforcing their radical ideas. Indeed, on the Internet ideas
so bizarre that they could never be introduced on talk radio can gain a foot hold and further radicalize
a portion of talk radios already radicalized followers. A good example of this ultra-extremism is
the rise of websites focused on the takeover of the planet by shape-shifting (supposed Illuminati)
alien reptilians. Here is an explanation for all ones problems! George Bush, Bill Clinton, in fact
all the major world leaders only appear to have their differences, because underneath they are all
beings from an alien species of reptiles that have taken over the planet!
The real problem with the ideological radicalization of a portion of the population is its
susceptibility to fascist movements. The hatred motivating such persons blinds them to the dangers
of such movements and allows them to do the unthinkableat least what they would have considered
the unthinkable before becoming radicalized.
Talk radio hosts are interested in the success of their programming, which includes money
and power that comes with such success. They use hate as a tool because it is so effective and likely
do not fully understand the consequences of doing so. Nevertheless, the result of this in times of
great inequality can be dangerous to all with virtually no prospect of any improvement in the
situations of listeners.
Imperial America
Yet, another player in the perfect storm was the Project for the New American Century
(PNAC). The agenda of this organization was to insure American preeminence in the world ensured
through overwhelming military control. The PNAC has made its case through letters to government
officials, the PNAC web site, The American Enterprise Institute, the journal The Weekly Standard,
and many other avenues. Members advocated that the U.S. take steps to insure its place as the only
superpower in the world and to reap the benefits of such status. For example, they advocated
military control of space and the maintenance of military bases around the world.
The PNAC also urged a very hard line against opponents who would challenge this control
such as Saddam Hussain, the fifth president of Iraq. They pressured the U.S. government to invade
Iraq several years before the Al-Qaeda attack on the U.S. on September 11, 2001. PNAC members
were well represented in the Bush administration starting in 2000. Perhaps most notable were Vice
President, Richard Cheney; Secretary of Defense, Donald Rumsfeld; and Deputy Secretary of
Defense, Paul Wolfowitz. It is well understood that the PNAC thought that its agenda for American
dominance would need a crucial event to galvanize public support. The attacks of 9/11 served this
purpose in the case of Iraq, by the frequently repeated, yet totally discredited, mantra that Saddam
Hussain was working with Al-Qaeda.15 With no evidence that this was true and very good reasons
to think it untrue, the Bush administration insisted that the link existed. For good measure the
administration added the concern over weapons of mass destruction as its reason for entering Iraq.16
The PNAC was strongly supportive of the Iraqi National Congress (INC), an organization
created at the behest of the U.S. government through the public relations firm the Rendon Group.
Direct support came through the CIA for the purpose of creating the conditions to get rid of Saddam
Hussain. Once military victory was achieved, the INC would be in place to begin governing the
country. The PNAC also created its own organization to educate Americans called the Committee
for the Liberation of Iraq.
The Chinese and others were actively pursuing relationships with Saddam Hussain to be
involved in Iraqs oil production. Overthrowing Saddam and installing a government more favorable
to the Americans would allow U.S. oil companies to stop these deals between Iraq and other oil
companies. The U.S. oil companies could then gain the principal contracts from a new Iraqi
government for Iraqi oil--one of the largest oil fields in the world. Indeed, Ahmed Chalabi, the
principal spokesperson for the INC, continually promised oil concessions for whoever would help
them come to power in Iraq. Paul Wolfowitz went public with the idea that the entire war against
Saddam could be paid for by Iraqi oil revenues.17 Yet, the reality is that nothing close to this
materialized and the financial cost to the U.S. tax payers could eventually be around 3 trillion
dollars.18 The total unpreparedness to govern Iraq that the Bush administration experienced once it
had successfully disposed of Saddam Hussain suggests the belief in the administration that
Americans would be greeted with open arms and the exiled INC could take over with ease.
The ensuing many years of counter-insurgency warfare that has bogged down the U.S. in Iraq,
has also been very lucrative to many U.S. corporations. These beneficiaries include those involved
directly in Iraq such as Halliburton and, also, the many defense contractors supplying the war. Most
notably, however, is the diversion provided to corporate America by the threat of Al-Qaeda and the
continuing war in Iraq. The war against terror takes the focus off corporate abuse. On the other
hand, the cost of the war has been great. Tens of thousands of Iraqi civilians have been killed and
long predicted ethnic cleansing has further divided the country making it more difficult to govern.
The U.S. losses in personnel are in the thousands and the financial burden will cause economic strain
for decades. Finally, of great importance to the U.S. and much of the rest of the world, Iran has had
it biggest enemy and countervailing power in the region--Iraq--removed.
The Rise of the Predator State

There have been a number of investigations of how the relationships between business and
government in the U.S. has grown since mid-twentieth century. They all show a downturn in the
quality of life of the average American. One of the most sophisticated of these by way of its
examination of economics is James K. Galbraiths, The Predator State: How Conservatives
Abandoned the Free Market and Why Liberals Should Too.19 He argues that conservative economic
principles have failed and that conservatives no longer have policy recommendations for dealing
with problems like the global warming or health care. This is not to imply that liberals do have
solutions, especially not those who have accepted the idea that unregulated markets nearly always
lead to superior efficiency, innovation, and productivity. However, Galbraith contends that behind
the conservative talking points are actions which no longer coincide with conservative principles.
These are actions of what he calls the Predator State.
The Predator State is an economic system wherein entire sectors have been built up
to feast on public systems built originally for public purposes and largely serving the middle
class. The corporate republic simply administers the spoils system. On a day-to-day basis,
the business of its leadership is to deliver favors to their clients. These range from coal
companies to sweatshop operators to military contractors. They include the misanthropes
who led the campaign to destroy the estate tax; Charles Schwab, who suggested the dividend
tax cut of 2003; the Benedict Arnold companies that move their taxable income to
Bermuda or the Isle of Jersey. They include the privatizers of Social Security and those who
put the drug companies in position to profit from Medicare. Everywhere you look,
regulatory functions have been turned over to lobbyists. Everywhere you look, the public
decision is made by the agent of a private party for the purpose of delivering private gain.
This is not an accident: it is a system.20
One step along the way to the Predator State was the reconfiguration of the Republican Party.
By the 1980s elements within the party were making progress in their rebellion against traditional
conservatives. One of these rebels, Paul Weyrich, maintained, We are no longer working to
preserve the status quo. We are radicals, working to overturn the present power structure of this
country.21 Young rebels like Jack Abramoff and Grover Norquist found that they could solicit
significant funding from business for the non-profit organizations that they headed to fight against
government regulations. They created power and lucrative positions for themselves by making a
profit from returning the wealthy to power. They were highly successful in such enterprises as the
College Republicans which they turned into a significant force within the Party, but because they
developed their own sources of funding they could no longer be controlled by the Republican Party.
They purged the College Republicans and turned it and other organizations into belligerent anti-
liberal organizations.22 This aggressive pursuit of radical conservative ideas like Norquists views
on doing away with almost all taxation characterized the rebels. The purging of moderates has
continued over the years, as can be seen in the necessity of Sen. Arlen Specters switch to the
Democratic Party in 2009. This was but one example of RINO (Republican In Name Only) hunting.
Republican President Dwight Eisenhower, if he had lived to see it, would have been aghast at the
Republican Party at the beginning of the twenty-first century. For many Republicans this has
amounted to the hijacking of their party just as we had noted earlier for the more liberal churches and
the concerns of their membership expressed as the Hijacking of Jesus. The results of these
conflicts within the Republican Party has been an ascendency in terms of influence of the more
conservative wing over the middle and more liberal wings.
Some of the Radical Republican politicians are not the only predators in the early twenty-first
century. Many Democratic politicians, as well, have found it simply too tempting to refuse to
participate in the Predator State. Many have succumbed to taking large campaign contributions from
corporations and accepted favors from corporate lobbyists. It has become a very convenient way to
help their re-election campaigns by reaching into deep pockets. The results of this trend towards
increasing predation has included a myriad of ways of transferring wealth from the majority of the
population to the top of the society. Pulitzer Prize-Winning reporter David Cay Johnston documents
many of these sources of inequality in Perfectly Legal: The Covert Campaign To Rig Our Tax
System To Benefit The Super RichAnd Cheat Everybody Else and Free Lunch: How the Wealthiest
Americans Enrich Themselves At Government Expense (And Stick You With The Bill).
The conjunction of all these influences near the beginning of the twenty-first century has truly
been a perfect storm for passing power and wealth to the few. The gutting of many of the services
to the public and the takeover of various units of the government has brought the very existence of
democracy in America into question. As Justice Louis Brandeis once said, We can have democracy
in this country, or we can have great wealth concentrated in the hands of a few, but we cannot have
both. The Predator State presents an even bigger problem than the loss of freedom for the
American people. It also means there may be no way to pressure the upper class and its corporate
allies to help address the tremendous environmental problems the world presently faces. Greed will
make action on this front very difficult.
The Real Problem
Political economy is real. Economics can never be divorced from politics. So it is with the
world market. The biggest investors, the highest paid managers, and the transnational corporations
to which they are tied are networked across nations. Their loyalties for the most part are to the
enhancement of the network which in turn will enhance them individually. The investors, managers,
and other highly paid participants in the network such as lobbyists and even some social scientists--
who help legitimate the actions of the network to the world--constitute a category class. This is an
international upper class (plus its retainers such as lobbyists) that is largely beyond the control of
individual nations. Yet, to enhance the economic advantage of the network requires political
influence within the individual nations.
There is no official world government, but there are networked organizations that serve many
governmental functions. The General Agreement on Tarriffs and Trade (GATT), The International
Monetary Fund (IMF), and the World Bank were all part of the Bretton Woods agreement of 1944.
These organizations were to facilitate trade between sovereign nations. However, under the Clinton
Administration the U.S. joined the World Trade Organization (WTO) which in effect removed much
of that sovereignty. This was the result of a blitz of political pressure and media campaigns directed
toward the American people and the U.S. Congress. Behind this offensive were traditional business
organizations such as the National Association of Manufactures. As well there were big publishers
such as Capital Cities/ABC, Gannett, McGraw-Hill, Time Warner, and Times Mirror. They used
their tremendous control of newspapers, magazines, and electronic media to promote this upgrade
of GATT to the WTO--supposedly to promote free trade for the good of everyone.
However, the new WTO was much more than just a tweaking of GATT. It in fact was more
like a constitution. As Jeff Faux puts it in The Global Class War (2006),
The language of the WTO, like the language of NAFTA, is constitutional. It sets
up supranational governance with powers to override what had previously been the province
of sovereign states. As professor Stephen Clarkson notes, both NAFTA and the WTO
perform the traditional role of constitutions. They entrench certain inviolate principles or
norms that are above the reach of any national legislature to alter; set limits on the behavior
of governments; define rights of citizenship; establish a judicial system to interpret its own
texts in the case of conflicts; and provide for enforcement of the courts decisions. The
nullification and impairment section of the WTO allows corporations to challenge the
laws of any country that can be shown to impair the benefits that the corporation could
expect to receive under the WTO. Using this provision, the government of Canada, on
behalf of its asbestos industry, has brought suit against France for its domestic ban on the
use of asbestos.23
The American people have yet to realize how much control over their lives Congress gave away
when it agreed to the terms of the WTO. The WTO did for the world what NAFTA (which is also
constitutional) did for the North American continent.
Network members meet periodically, in places like Davos, a resort in the Swiss Alps, to
conduct the affairs of the world. A good sense of the participants in the network can be had from
the following excerpt from a private e-mail sent by a Pulitzer-Prise-winning journalist to her friends.
Finally, who are these guys? I actually enjoyed a lot of my conversations, and found many
of the leaders and rich quite charming and remarkably candid. Some dressed elegantly, no
matter how bitter, cold and snowy it was, but most seemed quite happy in ski clothes or
casual attire. Women wearing pants was perfectly acceptable, and the elite is sufficiently
multicultural that even the suit and tie lacks a sense of dominance.
Watching Bill Clinton address the conference while sitting in the hotel room of the
President of Mozambiquewe were viewing it on closed circuit TVI got juicy blow-by-
blow analysis of U.S. foreign policy from a remarkably candid head of state. A day spent
with Bill Gates turned out to be fascinating and fun. I found the CEO of Heineken hilarious,
and George Soros seemed quite earnest about confronting AIDS. Vincente Foxwho I had
breakfast withproved sexy and smart like awell, a fox. David Stern (Chair of the NBA)
ran up and gave me a hug.
The world isnt run by a clever cabal. Its run by about 5,000 bickering, sometimes
charming, usually arrogant, mostly male people who are accustomed to living in either
phenomenal wealth or great personal power. A few have both. . . . They are comfortable
working across languages, cultures and gender, though white Caucasian males still
outnumber all other categories. They adore hi-tech gadgets and are glued to their cell phone.
Welcome to Earth: meet the leaders.24
Networks are not the same as tightknit conspiracies such as the supposed one run by a giant
computer in Brussels that so worries the militia movement and the Identity Christians. The network
of the international upper class consists of changing relationships between changing personalities
and transnational corporations all responding to similar class circumstances. The individuals
involved are not inherently evil although some of the things they do to enhance their wealth and
power can turnout to be positively monstrous. The problem is the lack of balance. There are no
opposing views that can actually get a hearing and even if they could their backers would not have
the power to force a compromise. This is not solely a right wing phenomenon. In the U.S. both of
the two major political parties have connections to this global upper class and are well reward for
their contributions. Bill Clinton as a Democrat successfully pressured for the passage of NAFTA
and the WTO, both strongly advocated by Republicans.
The network is not concerned about the well-being of the people of the world . Jobs are
moved around and some people are subjected to enormous levels of pollution. This disregard of
ordinary people can be seen in America where a significant proportion of many types of work have
been outsourced to other countries with much more to come. People who can afford $11,000 a night
hotel accommodations are not likely to consider what it means to loss ones job or to have no health
care.
People all over the post-industrial world have protested their loss of jobs and the otherwise
lowering of the quality of their lives. Unfortunately, such scattered and uncoordinated protests are
nothing more than annoying to the global upper class. Through its agencies of control, such as the
WTO, IMF, and the World Bank the global upper class insists on free markets where their
imposition will benefit it and insist upon various forms of command such as bailouts again where
it would benefit. Ha-Joon Changs Bad Samaritans is replete with examples of such self-serving
duplicity. Through its significant control of the no longer free press, the global upper class can
spin any level of command as being for the good of all even though only the rich are really favored.
Jeff Faux argues that NAFTA has in fact produced a North American economy. For
example, an automobile supposedly made in the U.S. has parts that have crossed the Mexican and
Canadian boarder. Sometime such crossings are numerous as other parts are added to subsystems
of the vehicle. It may even be the case that the vehicle underwent final assembly either in Mexico
or Canada but bears the label of a U.S. transnational corporation. Faux further argues that this whole
process has gone so far that it cannot be untangled without great economic loss for all involved.
Faux also suggests that the upper classes of the three nations of NAFTA created this
economic union for their own good without the real consent of the citizens of any of these nations.
He also predicts that even though these elites have profited immensely so far, the level of
exploitation of the citizens of these countries is heading to such a level that the political tide will
eventually turn against them. The extent of such change is unclear, but it likely would be limited not
only by the difficulty of organizing against such a powerful network but by the ability of the network
to shape thought. It is extremely difficult for the average member of a society to realize that the
organization of ones beloved nation has been transformed to being very much like a cult.
Parallels With Cults
Recalling our previous discussion of cults gives us some interesting and frightening parallels
to the present organization of the United States. Cults, of course, exert strong control procedures.
Control is not as coordinated and centralized in the U.S. as one would find in a well developed cult.
However, the similarity of class interests for the upper class and its business vehicles--transnational
corporations--do effectively produce considerable coordination. The creation of the conservative
movement in the second half of the twentieth century is a case in point. This movement portrayed
markets as sacred. It also attempted to undermine any opposition by labeling all contrary thought
as Liberal and demonizing the word Liberal. Eventually, it was so difficult for Liberals to even
admit to being the L word that many started referring to themselves as progressives.
The suggestion of an entire society exhibiting cult-like activity surely would seem to many
persons to be ridiculous. Being as kind as they could be, they would suggest that one return to a
serious topic. Yet, does the average cult member know that they are in a cult? Of course not! They
have accepted the bounded rationality in which they are surrounded, including the idea that they are
being served by the cult or are at least co-partners with the other members in some glorious task.
It never dawns on most of them that they are being used to serve the desires of someone else. For
example, the average North Korean has learned to worship Dear Leader--the dictator Kim Jong-Il--
as something akin to a deity. Yet, such persons have no idea how many of their country men have
starved to death or barely escaped such a fate by eating tree bark or illegally (and with great danger
to themselves) escaping to China in order that Dear Leader may live in luxury. Recall our earlier
discussion of cults. A cult is not necessarily a small cadre of extremely weak-minded and largely
incompetent people led around by the nose by a wild-eyed, long-hair, megalomaniac. All
organizations teach some biased, and sometimes even erroneous, social constructions that are
accepted as real by most of its members. Many organizations use strong methods of control whereby
critical thought is frowned upon or prohibited, and social constructions with little to no scientific
validity are taught as truth. Yet, we do not have a cult until an organization using strong control also
takes advantage of the average member in order to serve the desires of the leadership.
Some societies have no difficulty purposely and overtly implementing strong control, for
example, the former Soviet Union or Nazi Germany. However, societies can also demonstrate the
equivalent of strong control through an accumulation of practices based upon class interests. In
place of total top down planned propaganda entering the minds of the members from many avenues
such as the media and schools, there is another possibility. It is also possible that similar messages
could come from independent sources, because the producers of those messages benefitted in similar
ways from the general themes of those messages. The various attacks of the corporate upper class
in the U.S. against the programs of the New Deal and against the type of thinking that supported such
programs constitute such biased and erroneous social constructions.
But how can we be sure that this is really the case? And, if we believe that it is the case, how
do we know that we are not merely the victims of some other biased social constructions? This
question is the same for all persons who might suspect that they are in a cult, not just for members
of a society. The answer is the same as well, and it is an answer that is simple to state and difficult
to answer in actual practice. The answer is that one is in a cult if there is evidence that the leadership
is exploiting the rest of the organization and hiding this fact through biased and erroneous social
constructions, that is, through cultural nonsense. The problem is in getting and evaluating the
evidence to determine if this is actually the case. Since average persons are ill-equipped to do so,
such evidence often eludes them. Nevertheless, there are occasions when the evidence has mounted
so long and so high that a significant proportion of the members of an organization rebel.
Unfortunately, there will also always be a significant proportion of the membership who will believe
the explanations and excuses of the leadership as to why the rebels are wrong and that those rebels
will be going straight to hell. It does not seem unreasonable to suspect that many of these defenders
of the cult are strongly authoritarian. Being betrayed by their beloved leader would be hard to accept
and lacking practice in critical thinking the excuses will seem plausible. Nevertheless, there can
arise a critical mass of disillusioned followers capable of demanding reorganization or simply
deposing of the leaders and implementing change themselves. This worked out rather well for the
rebels in the American Revolution and rather poorly for the rebels in the French Revolution even
though the latter were also successful in deposing the government against which they had rebelled.
Again, this worked out rather well for the average person in the U.S. after the Great Depression and
WWII and not so well for the upper class that had so long denied their needs. The riots in Great
Briton beginning in August of 2011 suggest that inequality that is less than that present in the United
States at the same time can spark unrest. Will the build up of inequality and the accompanying
diminution of democracy taking place since the 1970s in the U.S. produce its own critical mass?
Played Like a Fiddle
Recall that an upper class cannot rule in a society with a quasi-democratic form of
organization or a full democracy with its own votes. Its numbers are simply too few. The only
choice for the upper class is to convince enough members of the middle and lower-classes that it is
in their best interests to vote for candidates and policies favored by the upper class. Logically this
would necessitate convincing people to vote against their own true interests. Historically this has
not proven difficult, particularly in the United States with its long history of division by race.
Indeed, as we noted in Chapter III, such division was the goal of the creation of the first race laws
in the Virginia Assembly in the late 1650s. Today race is still useful but not as potent as it use to
be for a divide and conquer strategy. The most recent division is between liberals and conservatives.
Liberals have been vilified by a number of sources, including right wing entrepreneurial operatives
like Jack Abramoff or even persons concerned about what they consider excess with respect to
advancement of the rights of minorities and women on the part of the extreme left. Both the
legitimate and the nonsensical criticisms of liberals advance the interests of the upper class whether
they had much to do with instigating such division or not. Because of this vilification of liberals,
average American conservatives are led to believe that their rather difficult economic situations have
not only been caused by liberals but that liberals want to take the country in a direction that would
ultimately be ruinous. This was clearly seen in the health care reform debates of 2009.
In his first year in office President Obama pressed for health care reform to include a form
of government administered health insurance similar to Medicare to compete with the for-profit
insurance companies. Many of these for-profit insurers sensed a major threat to their profitability
and began advertizing campaigns to avoid such competition and thus defend their future prospects.
It did not take much effort to bring many adherents of the political right and a good proportion of
independents into extremist thinking. Here was a President who was both black and a liberal. Who
in his or her right mind could trust that combination? After all, every American had heard for years
the unfounded claim that liberals tax and spend and this results in larger and larger government and
fewer and fewer rights for people. Worse the suggested government involvement in health care was
said to amount to socialism which was equated with trying to start the U.S. down the road to a
version of the former Soviet Union. President Obama was also likened to Hitler and his health care
reform program as something the Nazis would have imposed. While the political left was
dumbfounded by such claims, they made sense to many on the right and among independents as well.
Such widespread acceptance could be laid at the doorstep of suspicion of liberals, of big
government, of any economic form other than unregulated markets, and in some cases of a black
president. Government cannot do anything effectively was another mantra. However, all these
themes are favorable to the upper class and have been promoted for decades by agents of the upper
class and persons and organizations which seek the favor of the corporate upper class.
The idea that businesses can always do a better job than government or non-profit
organizations is belied by history. Businesses can be terribly inefficient and down right
unscrupulous. They have been known to mistreat and endanger the lives of their workers. Some
have mislead and shamelessly exploited the general public through shoddy products such as the
Firestone 500 tires that were not recalled even though they had caused some terrible accidents when
blowing out. Just one of many more examples was with Ford Pintos left on the market even after
a number of people had burned to death in rear-end collisions when the gas tank ruptured. In both
the Firestone and the Ford examples the profits from sales exceeded the cost of law suit settlements
and thus the amoral decision to continue to seek profits was made. Businesses always have the
temptation to take shortcuts or to manipulate things in order to increase profits. Enron actually
manipulated power shortages in California leading to billions of dollars in unnecessary expense for
Californians and high profits for Enron. The efficiency of production, extent of innovation, and
treatment of workers and the public all depend upon the particular business. Some are tremendously
efficient and innovative, as well as fair and helpful in their treatment of their employees and the
public, but just as clearly others are not.
Government can be just as bad and just as good as business. If one does not believe that
government can do anything right, then one must conclude that the U.S. Army is one big
boondoggle. Now some folks who have served in the Army can tell you horror stories of
inefficiency, but the Army is a very large organization and similar stories can be found in for-profit
businesses. The Army is also very innovative. It monitors its actions and learns from its mistakes
and can rival some of the best businesses for organizational effectiveness. Indeed, the U.S. Army
has long been the envy of other armies around the world. Yet, the U.S. Army is not only a socialist
organization but command/socialist and governed by military bureaucrats called generals, as well
as, civilian bureaucrats in the Pentagon. Needless-to-say, these same points apply to the other
military services in the U.S. as well. And what about those 9/11 heroes in New York. Indeed,
heroes is what the police and firefighters were called who answered the emergency of the attack on
the World Trade Towers in 2001. Both organizations--police and fire departments--are socialist.
Societies long ago learned that having for-profit fire and police protection would allow profits to
interfere with missions that are vital to public well-being. As far as the hysteria has gone, it is
surprising that persons scared about the perils of socialism do not more often point out that fire
departments use red trucks--a sure sign of their connection to communism and, therefore, to
socialism!
As for big government, a large, technologically advanced society must have involvement in
many things to protect and enhance the interests of its citizens. Of course, it can become too big,
and it can overly interfere with the freedom of its citizens. Yet, there is almost nothing about size
that would make a government either useful, or on-the-other-hand, problematic to its citizens. Yet,
the phrase big government has become a mantra behind attacks on government programs helpful
to the average person and harmful to the upper class. When average persons, accept this coded
phrase as a negative thing which they must fight, they are often working against their own interests.
They will not benefit from small government they will only benefit from government--large or small-
-that actually is designed and run to help them and not solely the upper class. Many members of the
upper class love government, big or small, that enforces tax laws in their favor or laws against
laborers in their corporations. On-the-other-hand, many members of the upper class hate
government, big or small, that requires them to pay a fair share of the taxes of the nation or protects
workers health and safety in the work place. There is never enough wealth in any society to satisfy
everyone. If the upper class has little influence on government, its share of the total wealth of the
nation will be decreased compared to when it gains major influence over the government. This
applies to a socialist/command one party dictatorship like that of the former Soviet Union or to a
largely capitalist/market quasi-democracy like the United States.
As for the idea of tax and spend applied to liberals, certainly there was some truth to this
under the New Deal. Of course, much taxing of the rich and much less of the rest of the population
was the case. Partly this was necessary to pull the country out of the Great Depression brought on
by upper class resistance to regulated markets. There also was considerable taxing and spending
after World War II. This continued, although to a much lower degree, up until deregulation and
emphasis on markets where brought back by the Reagan Administration (not the Eisenhower or
Nixon Republican Administrations preceding it). However, at the beginning of deregulation the
average person paid a very small percentage of total income in taxes and the wealthy paid much
more. By the turn of the century these percentages had largely been reversed thus greatly favoring
the wealthy. Furthermore, much of the often criticized spending was to meet the needs of average
people. This certainly was not the level of assistance to the average person that already existed in
many European societies, but much more than what was available later. On-the-other-hand, the
Democrats never solved the welfare problem for the poor and often these programs did as much
harm as good. With the Obama Administration the supposed tax and spend Democrats were again
in office. Yet, just as with the Great Depression, they were again forced to try to spend the country
out of a deregulated economy that had imploded. Fortunately, this time the Republican Bush
administration had already started Keynesian solution of trying to prime the pump with government
spending, as the Great Recession started during that administrations tenure. This was a much needed
and timely departure from the idea of unregulated markets this administration had promoted for eight
years. Yet, the Democrats had contributed to this mess as well. Democratic Presidents Jimmy
Carter and Bill Clinton had promoted some deregulation. Furthermore, as noted above many
Democrats in Congress had accepted large donations from corporations and other upper class sources
and used their votes and influence to in effect promote the interests of the upper class. However, the
Obama Administration never would have pushed for a large stimulus package if the economy had
not been heading for a full blown depression. First it would have been unnecessary. It also would
have been irresponsible while two unfunded wars were in progress, as well as political suicide given
the largely unwarranted association of Democrats with tax and spend.
Yet, the greatest irony is that the two administrations that left the country with the largest
debts before the stock market crash of 2008 were the Reagan and Bush II Administrations. This, of
course, left economic conservatives positively apoplectic, but unbeknown to many conservatives,
these administrations were no longer interested in balancing the budget. First there was the attempt
to create large deficits in order to deprive the government of funding. The idea was that lack of
money would make government smaller and was called Starve the Beast by its Republican
proponents. By the Reagan Administration this had become an informal Republican policy. This
policy was seen as a form of protection in case Democrats would win the next election. The second
reason for deficit spending appeared in the Bush II Administration. Conservatives who looked at
government as a business opportunity had supplanted the Starve the Beast Republicans. Under
Bush II taxes were low for the upper class and high for everyone else, and government agencies had
been gutted of real regulatory control. More important was the use of government regulatory
agencies to actually enhance some businesses despite whatever regulatory mandate the agency might
have. This was no longer a thrust to make government smaller, but rather an attempt to make
government much more responsive to business interests at the expense of everyone else. Big
spending by big government was now very profitable for big business. The relationships between
big business, labor, and government which after the Great Depression entered into a few decades of
uneasy balance had by the end of the twentieth century been transformed into a business and
government alliance. The U.S. had become in Galbraiths terms, a Predator State.25
After the stock market crash of 2008 and about forty years of declining opportunity and
quality of life for most Americans, the average person knew something was wrong. Yet, the average
American had been indoctrinated into the free market mentality and consumerism, among other
sources of cultural change for more than those 40 years. Under these conditions there was no
possibility that the average person was equipped to understand what was behind this decline.
In the Predator State, many people judge politicians and public policy by how close they
advocate and approximate the upper class mantras, thought by the such persons to reflect their own
needs. When authorities said that the Obama health plan would have death panels, their followers
took this claim at face value. Never mind that Obama had never even mentioned such an entity.
Never mind that the initial source of this myth was an action by a Republican Congressman. He had
inserted a provision in one of the five health care bills in Congress to reimburse doctors for
counseling patients about their options for end of life care. Death Panels sounded like something
that liberal socialists would create. Surveys showed the death panel idea to be most readily
accepted in the poorest states, especially states with a high percentage of elderly. Here were the
people who needed better health care the most, but were unwittingly the supporters of those who
would actually withhold care. No mention was made about the real death panels run by the health
insurance companies. These are offices set up to find ways of denying coverage for life saving
procedures or finding ways to revoke coverage when the bill to the insurance company was likely
to be very high. This widespread practice among insurers is well documented, and it is not because
insurance companies are inherently evil. It is rather, because they are amoral corporations who
cannot increase the profits of their shareholders by paying for the care of persons with costly health
problems. Nevertheless, their frequent denials of payment cost tens of thousands of lives and a huge
proportion of all bankruptcies of American families every year.
Perhaps what is most interesting about the health care debates is the reliance of the
combatants on ideology rather than data. As other industrial countries have decided to reform their
provision of health care, they have had the intelligence to look at the many existing successful
programs in other countries. Their experts, not their politicians or average voters, study the
advantages and disadvantages of these different programs and try to institute the best practices and
avoid the pitfalls they find in other programs. Of course, in the U.S. the drug and health insurance
companies are the players with the most to loose in reform. Data is the last thing they want to see.
It is much easier to manipulate ideology than data. Furthermore, looking at data makes it clear that
for-profit insurance programs contribute nothing beyond what non-profits can do other than make
some people rich from the misfortunes of others.
As we discussed in Chapter IV, all organizations, including societies, have relationships

between social structure and culture that construct a sense of reality. When this is purposely done
and strongly enforced, that organization has significant similarity to the social structure and culture
of a cult. When this construction of supposed reality is produced to exploit the general membership
of the organization for the benefit of the leadership, a fully developed cult exists. By this reasoning
a Predator State is very much like a cult. No, it does not have a unified leadership normally found
in a cult. However, similar class interests of the very wealthy and powerful within a country
connected to each other through a world-wide network (constituting a world-level upper class) is a
close approximation to tightly knit leadership. Thus, to understand the Predator State, it is helpful
to think about how cults function. Furthermore, to break apart the false reality promoted by that
class and its retainers, the factors that help persons to break with cults must be understood.
Recall that most persons cannot even begin to think of leaving a cult until they have begun
to understand how leaders of cults manipulate the membership and abuse them. Seeing through the
lies is extremely difficult. The average member of a cult is played like a fiddle as the saying goes.
Abraham Lincoln believed, You can fool some of the people all of the time, and all of the
people some of the time, but you cannot fool all of the people all of the time. Still, it is not likely
that the American people have the resources or the energy, given the degree to which the quality of
their lives has fallen, to fight back instead of fight each other. Nevertheless, there will always be
those persons who want to try to regain some control of their country. They are ready to intelligently
and insightfully fight for a nation of the people, by the people, and for the people as Lincoln
defined democracy. They can no longer abide a nation of the people, by the corporations, for the
wealthy.
ENDNOTES
1. This not to say that there is no corporate or upper class influence on the news carried on public
broadcasting networks. For example, when Bill Moyers showed on PBS in the U.S. in the early
2000s the means by which corporations were influencing public thought and enriching
themselves, his show was rescheduled, downsized in duration, and changed in focus because of
complaints by conservative public figures. The network after all was dependent upon Congress
for its funding. And as the efforts of the right have gradually led to less and less government
support, PBS has turned more towards a light form of advertizing called sponsors many of
whom are corporations or Trust Funds. This likely has some impact on programing so as not to
offend a particularly generous sponsor.
2. Known as the Landrum-Griffin Act, it was officially labeled The Labor-Management

Reporting and Disclosure Act.
http://law.jrank.org/pages/8069/Landrum-Griffin-Act.html#ixzz18OuOY9uv
3. Rasmus (2006).
4. Rasmus (2006: 24).
5. Cassidy (2009: 111).
6. Phillips (2008: 31).
7. Johnston (2007:37-40).
8. For a more well rounded discussion of such job stress see Peck (2010).
9. Sometimes referred to as seeker churches.
10. Paul (2009: 30).
11. See Paul (2009: 31) Figure 8.
12. Reeves (1994).
13. INCB (2010: 65).
14. ICPS (2009).
15. Wright (2007).
16. The invasion of Iraq evidently was not at first proposed by or favored by President Bush, but
he eventually changed his mind under pressure from the PNAC members of his administration.
17. Blustein (2005).
18. Bilmes and Stiqlitz (2008).
19. Galbraith (2008).
20. Galbraith (2008: 146-147).
21. Saloma (1984: 49).
22. Frank (2008).
23. Wallch and Sforza (1999: 205).
24. Garrett (2003). Quoted in Faux (2006: 164-165).
25. Galbraith (2008).

CH 15 Political Economy and The Struggle For Democracy

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CH 15 Political Economy and The Struggle For Democracy

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CHAPTER XV

Cult of the Rich

The Struggle for Control of Society

The Never-Ending Struggle

Percentage of Unionized Wage and Salary Workers

1960 30.4 32.3

1999 13.5 32.6

Undoing the New Deal

Shares of Total Federal Tax Revenues

The Shifting Federal Tax burden, 1948-2003

The Great Shift in the American Economy

Transnational Corporations and the World Market

The Shift from Manufacturing to Finance

The Export of Manufacturing

The Increase in Consumerism

The Rise of Authoritarian Religion

American Religious Exceptionalism

Positive Thinking, the Megachurch, and the Corporation

Is There Democracy Without Results?

Cooling Out the Mark

Compared to Other Societies

1) New Age practices and religions,

The Perfect Storm

The Rise of FM Radio and the Internet

The Rise of the Predator State

The Real Problem

Parallels With Cults

Played Like a Fiddle

As we discussed in Chapter IV, all organizations, including societies, have relationships

2. Known as the Landrum-Griffin Act, it was officially labeled The Labor-Management

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