Post a Comment On: China Matters

Do you remember the end of history?  
I do.
You know, when the collapse of Soviet communism signaled the final triumph of American style democratic republican politics and free market economics…the victory that underlies the somewhat more scientific brand of American exceptionalism practiced by President Obama and excuses the often extralegal and violent insertion of the United States in world affairs?
But looking back at how the last twenty years have played out, I have a different theory of history: mob vs. snob.
By my reading, what keeps regimes in power is not the slavishness of their allegiance to democracy and free market tropes.
It’s whether they can command the united support of their elites, largely by ensuring that there are no plausible and ready alternatives for increasing and securing wealth and privilege regardless of whatever violence is done to the slogans of “free markets” and “democracy”.
That’s what happening in China, where the Chinese Communist Party has successfully fostered a “hang together or hang separately” vibe for the political and business elites; it’s what’s happened in Egypt as elites have rallied and united once again behind the army over the cadaver of the MB…and in Syria, where Bashar al Assad’s minority, undemocratic, and none too impressive regime has shown an astounding ability to retain the allegiance of its elites and exhibited a remarkable resilience. 
Thanks to serial miscalculations and misunderestimations of the survival skills of Bashar al Assad, the grim history of Western cheerleading for the Syrian revolution is usually ignored.  However, the defeat of the genuine Syrian revolution was the inability of the rural rebels to enlist the support of the urban elites or their offspring in 2011.  The first fatal moral and tactical failing of the revolution—and its cynical Western and Gulf backers--was to substitute armed insurrection for popular uprising in Damascus and Aleppo as punishment for the cities’ lack of revolutionary fervor, as well as an expression of the hope that a push for regime collapse would…well, usher in something better than the obscene carnival of murder, extremism, misery, and banditry that resulted.  
Perhaps Syrian elites are now cleaving even more closely and desperately to the Assad regime than they were back in 2011.
Elite solidarity is not what happened in the Soviet Union, thanks to Gorbachev’s abandonment of the Communist monopoly and the subsequent rush for the national exits by appalled apparatchiks, not into the dustbin of history, but into control of government organs and enterprises throughout the ex-Soviet empire.  
And elite solidarity is not the best one-word description of what’s happening in the United States.

I will illustrate my thesis by a romp through early American history.
During the “end of history” period, Alexander Hamilton was often invoked as the architect of the triumph of the Western system.  I am something of a pro-Hamiltonian revisionist, since the original critique of Hamilton that prevailed until the end of the 20th century (elite-adoring crypto aristo) was initially put forth by a pair of Virginia slaveowners, Thomas Jefferson and James Madison, who adored democracy in the abstract but had definite difficulties practicing it in the concrete.
Hamilton advocated a strong national government and orchestrated its establishment in the United States through his energetic participation in the composition, promotion, and, as first Treasury Secretary and George Washington’s most trusted counselor, implementation of the central-government friendly US constitution .  He frequently sparred with Jefferson and Madison, whose advocacy of (to editorialize here) la-di-da pastoralism on a foundation of slavery looks a lot like an effort to protect Virginian parochialism and particularism from the commercial and industrial transformation of the United States—a transformation that Hamilton, with his early and positive exposure to the British example, clearly saw coming, and which he enabled with a powerful central government with strong fiscal, legislative, and enforcement powers.
From the 21st century perspective the key element was Hamilton’s extremely successful attempt to create a robust alliance between the federal government and northern and northeastern business interests.  Hamilton was desperately invested in a strong, extensive federal union because the greater the sway of the federal government, the more unique and attractive it looked as a bulwark of power, stability, and property rights, and the better it could secure the loyalty of the elite.
Elite loyalty was, to put it mildly, an issue.  Not just because of pervasive Loyalist (to Britain) sentiment in the upper classes in the colonies that carried over into the early days of the Republic.  Also because the United States was created on a foundation of elite disloyalty, amplified by seditious incitement of populist forces.
It should be remembered that the American revolution was driven to a significant extent by the alienation of US elites, especially in New England, from Great Britain, and the creation of a potent alliance of “mob” and “snob” fatal to British rule.  The Sons of Liberty were despised as rabble by most of the founding fathers, but elite folk like John Adams, John Hancock, Thomas Jefferson, Patrick Henry, et. al. made the historic decision to stand with them, or maybe just exploit them as anti-British shock troops and provocateurs, instead of denouncing them.

The revolutionary elite retained its affection for independence and local impunity after the British were gone, and simply transferred it to the hapless and impotent post-1776 US confederation.
However, after independence—and by the time the constitution was written--US elites lost their love for the masses; Hamilton and his Federalists, in particular, lived in terror of the mob, thanks to the outbreak of Shays’s rebellion, the example of the French revolution and to the endless willingness of poor and disenfranchised folk, especially in the rural western reaches, to create a rumpus.
The normally phlegmatic George Washington was vocally dismayed by the Whiskey Rebellion in western Pennsylvania, and joined Hamilton in organizing an overwhelming federal force to march into the countryside and overawe the miscreants.  A similar exercise in federal shock and awe occurred when Hamilton marched a federal force against another Pennsylvania upset, Fries’ Rebellion, in 1799.
In the midst of the “Quasi War” with France in the late 1790s, Hamilton had lobbied President John Adams frantically (and, for the sake of his relationship with Adams, fatally) for a federal army that Hamilton would lead under the aegis of the largely retired George Washington.  This was held against Hamilton, both by Adams and Jefferson, as an open admission of Hamilton’s caesarism, since it was assumed that this army, while defending against the unlikely prospect of an invasion of the United States by Napoleon, could be used to cow the federal government or serve as the vehicle for some extra-curricular nationbuilding by Hamilton, such as the seizure and annexation of western lands—and maybe even South America--from their Spanish masters.
It seems more likely that Hamilton was carried away by the fear of a French-style rural jacquerie and Jacobin-style urban purge, perhaps sparked by some French military adventure and supported by a Jeffersonian fifth column, and wanted a federal army as a shield—and sword--against both.  And, admittedly, he wouldn’t have minded leading the army through the Americas after putting paid to the French menace, thereby winning more glory for himself and more territorial swag for the USA.  

But Hamilton’s efforts to create a strong federal edifice involved more than giving the central government independent military might to cow local “mobocracy” when the compromised state militias weren’t up to the task.  Strengthening the bond between the federal government and US elites—and weaning them from political collusion with the ever-present and easily aggrieved “mob”—was a key feature of Hamilton’s policy.
He famously bound elites to the federal government by promising to fund all federal debts (currently trading at ten or fifteen cents to the dollar) at par, to assume all state debts dating back to the revolution, and coming up with a plausible way of paying them.  He also rebuffed criticisms by Jefferson and Madison that this policy was a sell-out of the revolutionary war veterans who had been paid with these bonds but sold them at a deep discount to speculators, and an unfair windfall for Hamilton’s well-heeled and well-informed buddies.
There’s a little more to this than “the rich got richer and the poor got fucked” (though, of course, that’s exactly what happened).
Hamilton was intentionally giving the business elites some (inordinate) skin in the federal game, so that they would cleave to the federal government and not side with the mob—or their states--as they had in revolutionary times against Britain, or during any of the serial crises that would occur as the United States embarked on its bloody and highly successful campaign exploit the resources of the land, the labor and creativity of its people, the capital and energies of the elites, and the enormous potential of national and global markets.
Specifically, Hamilton devoted a great deal of intellect and energy to creating a bond between rich guy and the central government that would address the biggest threat to the federal system: secession.

You know, like the kind of secession the 13 colonies carried out only a decade before against the British government, and was threatened every time some cluster of US states weren’t getting their way.  The kind of secession that actually happened in 1861.  And the kind of secession that Tea Party enclaves like northern Colorado now invoke as a solution for their Obama-related grievances.  And the kind of secession (by the various Soviet SSRs and satellites) that brought the Soviet Union to its knees.  And the uprising in eastern Libya (capital: Benghazi) that brought down Qaddafi with a little outside help.
In each instance of secession, the secret sauce of freedom wasn’t democracy and free markets; it was the fact that local elites abandoned their allegiance to the center and sided with the locals instead.

Before the constitution was even ratified, secession was already on the American agenda.
The most famous of the Federalist papers, No. 10, written by Madison, rebutted the idea that democracy only works in small, homogenous states and couldn’t work in an extensive empire that the United States was clearly going to become.  Specifically, he argued that the republican form of government would interpose a civic-minded and unfactional elite between gormless voters and the operating levers of the government machinery.
Guess what.  Madison was wrong.  
Madison was also guilty of ironic foreshadowing, since he and Jefferson connived to create the first rebellious, elite-splitting faction in the US government, during the administration of John Adams.


The United States was bedeviled from its inception by the centripetal tendencies of its states and regions.  Stability and a significant measure of unity was only achieved after eighty years of escalating confrontation, through the rather undemocratic means of a massive civil war and a ten year occupation of the south.
And guess what.  You can blame Madison for that, too.
To me, the alpha and omega for Jefferson and Madison was southern privilege.  They recognized early on that southern privilege was based on a rickety, limited foundation of slavery-based agriculture, which was increasingly at risk in a strong federal system as the nation grew and industrialized and decisively moved away from the southern model.  If the constitution didn’t adequately support pretensions to southern political, economic, and social agency for the white crowd, it could go out the window.
Jefferson and Madison pioneered the state nullification doctrine in their Kentucky and Virginia resolutions and initiated seventy years of efforts to maintain southern autonomy which culminated in the Civil War.  After Hamilton shattered his Federalist faction with some unwise political maneuvers, Jefferson and Madison ruled the federal roost and the contradictions between the slave-owning priorities of the south and the rest of the union were papered over.  Pro-Jeffersonian history usually excuses Jefferson and Madison’s transgressions on the grounds that their nullification and state’s rights doctrines embodied in the Resolutions were a desperate and limited riposte to the flagrantly partisan and unconstitutional Alien and Sedition Acts.
Not so fast.  Secession, which I define as elite disloyalty combined with populist politics, a.k.a. the “mob and snob” revolutionary alliance, is as American as apple pie and suited the tastes of Jefferson and Madison.
It wasn’t just the south that toyed with secessionist impulses.  Northern secession was advocated by northern business classes frustrated by southern resistance to Federalist fiscal and economic policies and the fear that the “Virginia faction” had permanently captured the Federal government thanks to the inordinate weight of the south at the center thanks to the 3/5 rule (slaves counted at 3/5 for representation purposes) and the ceaseless, united obstructionism of southern delegations anxious to safeguard their dominance (and the future of the slave system) as the nation expanded.
One of the many reasons for Hamilton’s disdain for Aaron Burr that provoked the fatal duel was that Burr was looking to resurrect his political fortunes by conniving to bring his home state of New York into a nascent northern secessionist camp championed by elites in the New England states.
When the Federalist party imploded thanks to Hamilton’s spectacular political misjudgment and Jefferson and his acolytes controlled the Federal government for decades, northeastern interests organized the Hartford Convention during the War of 1812 to advance their pro-British/anti-embargo/pro-manufacturing interests and priorities.  Their activities carried the faint but undeniable whiff of secession.  The governor of Massachusetts even dispatched an emissary to discuss a separate peace with Great Britain.  This treasonous exercise never caught on, as the war ended rather abruptly and favorably for the United States, much to the discomfiture of the northerners and, in any case, the subsequent peace provided the economic benefits that had previously been denied them.
After three decades of southern domination, federal power inexorably shifted to the north and west, and the US government, while sedulous in preserving the financial, legal, and coercive foundations of northern prosperity, proved itself fatally ambivalent about protecting a key southern elite interest and the foundation of the southern agricultural economy—slaves as property.  When southern elites felt threatened by the prospect of loss of political primacy at the federal level and the threat of a growing abolitionist consensus in Congress, they were wedged off from the union (much as the business interests in the colonies were wedged off from Britain in the 1770s) and turned their efforts to creating a “mob and snob” integrated power base within their own states.
The result was decades of dismal extortion as the south used the threat of resistance/nullification/secession to extract assurances of continued passivity from the federal government on the slavery issue.  
When the civil war came, many of the southern elite quickly abandoned their allegiance to the federal government and jointed the CSA.
I also might point out that the mayor of New York City, with its textile and export economy tied to southern cotton, actually proposed New York secession in 1861.  The dreaded “mob and snob” alliance between some disgruntled New York plutocrats, Tammany politicians, Copperheads (anti-war Democrats willing to accept southern slavery) and the municipal lumpen re-emerged, culminating in the gruesome draft riots of 1863.
When the end came, it didn’t come thanks to the invincible ideas of democracy and free markets (with the obvious and execrable exception of slavery, southern economic and political practices did not differ significantly from those of the north); it came because the elites of the north united with the federal government to crush the south with their armies and industrial power.
With the civil war, the southern elites and their determinedly non-industrial, non-financial slave-shackled economy lost the argument to the determinedly industrial and financially sophisticated north. Conquest, the end of slavery, and the increasing industrialization of the United States made secession, southern or otherwise, an unfeasible option.  
Despite the awkward fact of southern elite treason, the importance of elite support for the federal government was reaffirmed as, after a brief interlude of carpetbagging, blacks were disenfranchised, and southern elites were welcomed back into local and federal governments and the heart of the southern economy.
This is not the triumph of democratic republicanism and free markets; it was the successful reaffirmation of elite solidarity with the federal government.
With the disappearance of the secessionist option, the impetus toward a “mob and snob” alliance evaporated, and elites and the federal government eagerly joined hands to protect property, privilege, and the well-being of elites, by gun and bayonet if needed.
The robust national alliance of elites and the federal government has survived the multiple crashes and cockups of capitalism—and racist states’ rights rabblerousing--and has endured to this day.  It’s not just in the republic of the United States; elites of fascist Germany and imperial Japan have similar if more distasteful epics of survival after national calamities.  Russian elites did a pretty good job of coming out on top after the USSR collapsed.  I have a feeling that, if the jerks in suits who run China are kicked out in some democratic upheaval, in ten years China will be run by…jerks in suits.
So what we were seeing at the end of the 20th century was not the “end of history”; it was the temporary, local, and situational cessation of elite mischief against central governments.
Things changed, in Russia and the Middle East.  Maybe things are about to change, here, in the United States, as well.
The US federal government in all its present day incarnations, be they Democratic or Republican, are desperately committed to keeping the rich folk happy and their property safe.  That counts for a lot, even with some pretty major mismanagement of the world portfolio over the last 15 years.
The US still has effective means to secure the support of increasingly globalized elites.  First, of course, as in Hamilton’s day, is the role of US government debt as the linchpin of the world economy.  The PRC government still puts most of its pin money in US treasury bonds; the world’s businessmen may be smarter in their investments, but they all want their acumen backstopped by the ready availability of a financial instrument of immense liquidity with a fixed rate of return backed by the taxing authority of the US government on the American economy.
So the elite consensus in favor of keeping the US government in business, at least as a bucket shop that underwrites global liquidity by the creation and marketing of hundreds of billions of dollars of securities, remains strong.
Having an immense military establishment in an atmosphere of perpetual threat doesn’t hurt, either.  Nor does, for that matter, absolute dominance of the global Internet/surveillance space.  These all attract the attention and engagement and, to a significant extent, the loyalty of Western elites.
Trouble is, nation-state advantages are less significant in a multi-polar, coexistence-based international regime.  What’s left if we wind down the Global War on Terror, as President Obama suggests?  There is a dearth of plausible threats and diminishing decent opportunities for the United States to invoke in return for the active support of an increasingly globalized elite.  
In the end, it’s not Iraq, derivatives, China or the BRICS that’s kicking America’s ass; it’s the planet.
This state of affairs is illustrated by “the two Gs”: globalization and global warming. 
Obviously, corporations have become multi-national, capital has been largely freed from national constraints, and the loyalty of capitalists—and their enthusiasm for supporting the US government—has become less enthusiastic and more conditional.
Mitt Romney is a clueless ass, but he voiced the sincere feelings of his fellow plutocrats as he expressed their resentment that the US government was trying to harvest the global riches of these almost accidental citizens in order to pursue domestic political and policy goals that seemed to them increasingly remote and incomprehensible.
As a result, the United States is harvesting increasing elite disdain and its sullen handmaiden, perpetual political gridlock.
The Koch brothers may very well fear and detest the rabble.  But the US federal government is only one of several resources available to them around the world to protect their personal and financial well-being.  They have, obviously, little affection for the federal government.  And they have no qualms about bankrolling the Tea Party.
But the ultimate threat to global well-being is climactic, not human—global warming.
Global warming is triggered by the runaway free-market capitalism that the nation-state fosters through its ideology, financial and legal system, and use of violence in order to secure the allegiance of the rich.  And it seems there’s nothing that the modern, republican, free-market-oriented, elite nurturing nation state can do about that.
Given the perhaps terminal limitations of the existing structure of nation-states, maybe all we can do is buckle our seatbelts and hope for the best—and cast our envious eyes at the climate-controlled fortresses the rich can construct on their remote mountaintops.  
Does that mean that the US system of democratic republicanism and free markets does not offer a solution? Is America, not history, dead, killed by absentee capitalists and an overheating planet? I am not sanguine concerning any revolutionary alternatives—although “mob” and “snob” did come together for a brief moment in 1776, and a few, less glorious interludes since then.
However, the capitalist system is infinitely creative, and the government is always on the lookout to demonstrate the relevance of its big, fancy financial system and gigantic military capabilities.
A nice, apocalyptic war against China might create enough profitable creative destruction to engage the elites, even those with significant interests inside China.  Maybe Susan Rice can gin up a “responsibility to protect” the environment to keep the capitalist ball rolling.  Can coal-burning power plants can be a casus belli?
Green war, anybody?