The Dissident's Toolkit

Want To Topple An Autocrat? Street Demonstrations Are Just One Tool Among Many.

BY ERICA CHENOWETH

Research shows, in fact, that demonstrations are just one of many tools that civil resistance movements can use to effect change. 

Successful movements are those that use a wide array of methods to pressure their state opponents while keeping their activists safe. The demonstration tactic we're used to seeing is just one of many hundreds of tactics available to civilians seeking change -- and successful campaigns for change must use more than just a single tactic.

Maria Stephan and I conducted research on a related but broader question: "When does civil resistance work?" The results of our research show that opposition campaigns are successful when they manage to do three key things: 

(1) attract widespread and diverse participation; (2) develop a strategy that allows them to maneuver around repression; and (3) provoke defections, loyalty shifts, or disobedience among regime elites and/or security forces.

Attracting participation is perhaps the most important of these tasks, since the ability to provoke defections and outmaneuver opponents often depends on whether the movement enjoys large and broad-based support. The most important singular factor for a successful campaign is its participation rate. 

According to the NAVCO data set, which identifies the outcomes of over 300 nonviolent and violent campaigns worldwide from 1900-2006, none of the cases failed after achieving the active and sustained participation of just 3.5 percent of the population -- and some of them succeeded with far less than that. 

Of course, 3.5 percent is nothing to sneeze at. In the United States today, this constitutes over 11 million people. But how do movements get this large in the first place, especially in countries where overt participation in a mass movement is highly risky?

One way organizers can grow their movement is by including tactics that are safer and therefore more attractive to risk-averse participants. 

For example, instead of relying solely on demonstrations or protests, many movements will allow people to participate through "electricity strikes" where people shut off their electricity at a coordinated time of day, or by banging on pots and pans in the middle of the night to signal the power in numbers. 

Engaging in these types of actions may draw in more ambivalent people while also allowing them the opportunity to develop a sense of identity with the movement and its goals. 

In Chile under Pinochet, for example, outright demonstrations against the dictator were far too dangerous. In one instance, Pinochet was so threatened by the subtext of some popular songs that he banned public singing; it didn't take much. But when people began to bang on pots and pans, it let them demonstrate their defiance anonymously in the safety of their own homes. 

As the people's metallic clamor for change became louder and louder, anti-Pinochet organizers and their supporters became emboldened to press for more disruptive and overt action. 

A similar movement is underway in Egypt today, where the "Masmou" movement has led thousands of people to bang on pots and pans inside their homes at 9 p.m. each night to signal that there are viable alternatives to both the al-Sisi government and the Muslim Brotherhood. 

In highly repressive environments there is, indeed, safety in numbers. And actions like this can signal that one is not alone, while making it quite difficult for the government to crack down on participants.

Once people do begin to mobilize, the effects on the internal politics of a tyrannical regime can be intense. 

As Gene Sharp rightly argued, no regime is monolithic. Every leader is 100 percent dependent on the cooperation, obedience, and help of the people that form the regime's pillars of support: security forces, the state media, business or educational elites, religious authorities, and civilian bureaucrats. And when such people begin to reevaluate the regime's role in their long-term interests, they can actually be pulled away from supporting the leader. This is much more likely to happen the more people are mobilized against the opponent.

Why? Because no regime loyalists in any country live entirely isolated from the population itself. They have friends, they have family, and they have existing relationships that will bring with them in the long term, regardless of whether the leader stays or goes. 

As the literary critic Robert Inchausti is credited as saying, "Nonviolence is a wager -- not so much on the goodness of humanity as on its infinite complexity." 

Take an example from the so-called "Bulldozer Revolution," a Serbian people power revolution against Slobodan Milosevic that toppled him in October 2000. In this case, once it became clear that hundreds of thousands of Serbs were descending on Belgrade to demand that Milosevic leave office, policemen ignored the order to shoot on demonstrators. When asked why he did so, one of them said: "I knew my kids were in the crowd."

This policeman wasn't alone in Serbia or elsewhere. We find that, in general, security forces tend to defect much more often when they face nonviolent campaigns (as compared to armed uprisings), particularly as the numbers rise. 

Controlling for other factors, security forces are about 60 percent likely to defect when confronted with the largest nonviolent campaigns and over 30 percent likely with the average-sized nonviolent campaign. 

The defection of security forces occurred within the ranks of the Iranian armed forces during the anti-Shah resistance, within Filipino armed forces during the anti-Marcos uprising, and within the Israeli military during the first Palestinian Intifada, to name but a few examples. And these loyalty shifts can be crucial for the outcomes of these campaigns: They increase their chances of success by over 60 percent.

Of course, demonstrations -- and people power movements in general -- tend to fail as often as they succeed. But when we look at outright failures -- such as Tiananmen Square, the 1956 Hungarian uprising, or the 2007 Saffron Revolution in Burma -- a few patterns become evident:

The failed campaigns never spread to include vast proportions of the population, and failed to shift between highly risky tactics and safer ones. 

But they also failed to establish a long-term strategy to make the campaigns sustainable, which was especially important given the brutality of state repression. 

The average duration of a nonviolent campaign was between two-and-a-half and three years, but few of these campaigns had a long-term strategy, besides the wishful hope that tactical victories might make the regime comply with their demands.

Campaigns of civil resistance are underway in many countries around the world, movement planners must carefully analyze the political effects that tactics like demonstrations have. 

If these tactics fail to increase sympathy for the campaign at home or abroad, diversify the base of participants, and encourage defections among regime elites, then they are not helping the movement's chances of succeeding. 

But rather than abandoning the struggle because demonstrations stop working, movement leaders would do well to appreciate the many other nonviolent methods of protest and noncooperation they can bring to bear against their opponents. 

The campaigns that ultimately succeed will be the ones that fully embrace Sun Tzu's warning that "tactics without strategy is the noise before defeat."

THE METHODS OF NONVIOLENT PROTEST AND PERSUASION 

Formal Statements 
1. Public Speeches 
2. Letters of opposition or support 
3. Declarations by organizations and institutions 
4. Signed public statements 
5. Declarations of indictment and intention 
6. Group or mass petitions 

Communications with a Wider Audience 
7. Slogans, caricatures, and symbols 
8. Banners, posters, and displayed communications 
9. Leaflets, pamphlets, and books 
10. Newspapers and journals 
11. Records, radio, and television 
12. Skywriting and earthwriting 

Group Representations 
13. Deputations 
14. Mock awards 
15. Group lobbying 
16. Picketing 
17. Mock elections 

Symbolic Public Acts 
18. Displays of flags and symbolic colors 
19. Wearing of symbols 
20. Prayer and worship 
21. Delivering symbolic objects 
22. Protest disrobings 
23. Destruction of own property 
24. Symbolic lights 
25. Displays of portraits 
26. Paint as protest 
27. New signs and names 
28. Symbolic sounds 
29. Symbolic reclamations 
30. Rude gestures 

Pressures on Individuals 
31. "Haunting" officials 
32. Taunting officials 
33. Fraternization 
34. Vigils 

Drama and Music 
35. Humorous skits and pranks 
36. Performances of plays and music 
37. Singing 

Processions 
38. Marches 
39. Parades 
40. Religious processions 
41. Pilgrimages 
42. Motorcades 

Honoring the Dead 
43. Political mourning 
44. Mock funerals 
45. Demonstrative funerals 
46. Homage at burial places 

Public Assemblies 
47. Assemblies of protest or support 
48. Protest meetings 
49. Camouflaged meetings of protest 
50. Teach-ins 

Withdrawal and Renunciation 
51. Walk-outs 
52. Silence 
53. Renouncing honors 
54. Turning one's back 


THE METHODS OF SOCIAL NONCOOPERATION 

Ostracism of Persons 
55. Social boycott 
56. Selective social boycott 
57. Lysistratic nonaction 
58. Excommunication 
59. Interdict 

Noncooperation with Social Events, Customs, and Institutions 
60. Suspension of social and sports activities 
61. Boycott of social affairs 
62. Student strike 
63. Social disobedience 
64. Withdrawal from social institutions 

Withdrawal from the Social System 
65. Stay-at-home 
66. Total personal noncooperation 
67. "Flight" of workers 
68. Sanctuary 
69. Collective disappearance 
70. Protest emigration (hijrat) 


THE METHODS OF ECONOMIC NONCOOPERATION: (1) ECONOMIC BOYCOTTS 

Actions by Consumers 
71. Consumers' boycott 
72. Nonconsumption of boycotted goods 
73. Policy of austerity 
74. Rent withholding 
75. Refusal to rent 
76. National consumers' boycott 
77. International consumers' boycott 

Action by Workers and Producers 
78. Workmen's boycott 
79. Producers' boycott 

Action by Middlemen 
80. Suppliers' and handlers' boycott 

Action by Owners and Management 
81. Traders' boycott 
82. Refusal to let or sell property 
83. Lockout 
84. Refusal of industrial assistance 
85. Merchants' "general strike" 

Action by Holders of Financial Resources 
86. Withdrawal of bank deposits 
87. Refusal to pay fees, dues, and assessments 
88. Refusal to pay debts or interest 
89. Severance of funds and credit 
90. Revenue refusal 
91. Refusal of a government's money 

Action by Governments 
92. Domestic embargo 
93. Blacklisting of traders 
94. International sellers' embargo 
95. International buyers' embargo 
96. International trade embargo 


THE METHODS OF ECONOMIC NONCOOPERATION: (2)THE STRIKE 

Symbolic Strikes 
97. Protest strike 
98. Quickie walkout (lightning strike) 

Agricultural Strikes 
99. Peasant strike 
100. Farm Workers' strike 

Strikes by Special Groups 
101. Refusal of impressed labor 
102. Prisoners' strike 
103. Craft strike 
104. Professional strike 

Ordinary Industrial Strikes 
105. Establishment strike 
106. Industry strike 
107. Sympathetic strike 

Restricted Strikes 
108. Detailed strike 
109. Bumper strike 
110. Slowdown strike 
111. Working-to-rule strike 
112. Reporting "sick" (sick-in) 
113. Strike by resignation 
114. Limited strike 
115. Selective strike 

Multi-Industry Strikes 
116. Generalized strike 
117. General strike 

Combination of Strikes and Economic Closures 
118. Hartal 
119. Economic shutdown 


THE METHODS OF POLITICAL NONCOOPERATION 

Rejection of Authority 
120. Withholding or withdrawal of allegiance 
121. Refusal of public support 
122. Literature and speeches advocating resistance 

Citizens' Noncooperation with Government 
123. Boycott of legislative bodies 
124. Boycott of elections 
125. Boycott of government employment and positions 
126. Boycott of government depts., agencies, and other bodies 
127. Withdrawal from government educational institutions 
128. Boycott of government-supported organizations 
129. Refusal of assistance to enforcement agents 
130. Removal of own signs and placemarks 
131. Refusal to accept appointed officials 
132. Refusal to dissolve existing institutions 

Citizens' Alternatives to Obedience 
133. Reluctant and slow compliance 
134. Nonobedience in absence of direct supervision 
135. Popular nonobedience 
136. Disguised disobedience 
137. Refusal of an assemblage or meeting to disperse 
138. Sitdown 
139. Noncooperation with conscription and deportation 
140. Hiding, escape, and false identities 
141. Civil disobedience of "illegitimate" laws 

Action by Government Personnel 
142. Selective refusal of assistance by government aides 
143. Blocking of lines of command and information 
144. Stalling and obstruction 
145. General administrative noncooperation 
146. Judicial noncooperation 
147. Deliberate inefficiency and selective noncooperation by enforcement agents 
148. Mutiny 

Domestic Governmental Action 
149. Quasi-legal evasions and delays 
150. Noncooperation by constituent governmental units 

International Governmental Action 
151. Changes in diplomatic and other representations 
152. Delay and cancellation of diplomatic events 
153. Withholding of diplomatic recognition 
154. Severance of diplomatic relations 
155. Withdrawal from international organizations 
156. Refusal of membership in international bodies 
157. Expulsion from international organizations 


THE METHODS OF NONVIOLENT INTERVENTION 

Psychological Intervention 
158. Self-exposure to the elements 
159. The fast 
a) Fast of moral pressure 
b) Hunger strike
c) Satyagrahic fast 
160. Reverse trial 
161. Nonviolent harassment 

Physical Intervention 
162. Sit-in 
163. Stand-in 
164. Ride-in 
165. Wade-in 
166. Mill-in 
167. Pray-in 
168. Nonviolent raids 
169. Nonviolent air raids 
170. Nonviolent invasion 
171. Nonviolent interjection 
172. Nonviolent obstruction 
173. Nonviolent occupation 

Social Intervention 
174. Establishing new social patterns 
175. Overloading of facilities 
176. Stall-in 
177. Speak-in 
178. Guerrilla theater 
179. Alternative social institutions 
180. Alternative communication system 

Economic Intervention 
181. Reverse strike 
182. Stay-in strike 
183. Nonviolent land seizure 
184. Defiance of blockades 
185. Politically motivated counterfeiting 
186. Preclusive purchasing 
187. Seizure of assets 
188. Dumping 
189. Selective patronage 
190. Alternative markets 
191. Alternative transportation systems 
192. Alternative economic institutions 

Political Intervention 
193. Overloading of administrative systems 
194. Disclosing identities of secret agents 
195. Seeking imprisonment 
196. Civil disobedience of "neutral" laws 
197. Work-on without collaboration 
198. Dual sovereignty and parallel government 

“We Are Preparing For Massive Civil War”

Says DHS Informant

Courtesy Of "Beacon Equity"

In a riveting interview on TruNews Radio, Wednesday, private investigator Doug Hagmann said high-level, reliable sources told him the U.S. Department of Homeland Security (DHS) is preparing for “massive civil war” in America.

“Folks, we’re getting ready for one massive economic collapse,” Hagmann told TruNewshost Rick Wiles.

“We have problems . . . The federal government is preparing for civil uprising,” he added, “so every time you hear about troop movements, every time you hear about movements of military equipment, the militarization of the police, the buying of the ammunition, all of this is . . . they (DHS) are preparing for a massive uprising.”

Hagmann goes on to say that his sources tell him the concerns of the DHS stem from a collapse of the U.S. dollar and the hyperinflation a collapse in the value of the world’s primary reserve currency implies to a nation of 311 million Americans, who, for the significant portion of the population, is armed.

Uprisings in Greece is, indeed, a problem, but an uprising of armed Americans becomes a matter of serious national security, a point addressed in a recent report by the Pentagon and highlighted as a vulnerability and threat to the U.S. during war-game exercises at the Department of Defense last year, according to one of the DoD’s war-game participants, Jim Rickards, author of Currency Wars: The Making of the Next Global Crisis.

Through his sources, Hagmann confirmed Rickards’ ongoing thesis of a fear of a U.S. dollar collapse at the hands of the Chinese (U.S. treasury bond holders of approximately $1 trillion) and, possibly, the Russians (threatening to launch a gold-backed ruble as an attractive alternative to the U.S. dollar) in retaliation for aggressive U.S. foreign policy initiatives against China’s and Russia’s strategic allies Iran and Syria.

“The one source that we have I’ve known since 1979,” Hagmann continued.  “He started out as a patrol officer and currently he is now working for a federal agency under the umbrella of the Department of Homeland Security; he’s in a position to know what policies are being initiated, what policies are being planned at this point, and he’s telling us right now—look, what you’re seeing is just the tip of the iceberg.  We are preparing, we, meaning the government, we are preparing for a massive civil war in this country.”

“There’s no hyperbole here,” he added, echoing Trends Research Institute’s Founder Gerald Celente’s forecast of last year.  Celente expects a collapse of the U.S. dollar and riots in America some time this year.

Since Celente’s ‘Civil War’ prediction of last year, executive orders NDAA and National Defense Resources Preparedness were signed into law by President Obama, which are both politically damaging actions taken by a sitting president.

And most recently, requests made by the DHS for the procurement of 450 million rounds of hollow-point ammunition only fuels speculation of an upcoming tragic event expected on American soil.

These major events, as shocking to the American people as they are, have taken place during an election year.

Escalating preparatory activities by the executive branch and DHS throughout the last decade—from the Patriot Act, to countless executive orders drafted to suspend (or strip) American civil liberties  “are just the beginning” of the nightmare to come, Hagmann said.

He added, “It’s going to get so much worse toward the election, and I’m not even sure we’re going to have an election in this country.  It’s going to be that bad, and this, as well, is coming from my sources.  But one source in particular said, ‘look, you don’t understand how bad it is.’  This stuff is real; these people, the Department of Homeland Security (DHS), they are ready to fight the American people.”

TruNews‘ Wiles asked Hagmann: who does the DHS expect to fight, in particular?  Another North versus South, the Yankees against the Confederates?  Hagmann stated the situation is far worse than a struggle between any two factions within the U.S.; it’s an anticipated nationwide emergency event centered on the nation’s currency.

“What they [DHS] are expecting, and again, this is according to my sources, what they’re expecting is the un-sustainability of the American dollar,” Hagmann said.  “And we know for a fact that we can no longer service our debt.  There’s going to be a period of hyperinflation . . . the dollar will be worthless . . . The economic collapse will be so severe, people won’t be ready for this.”

UK To Close Borders, Evacuate Expats If Euro Collapses

Submitted by "Sayf Maslul" 

Courtesy Of "Russia Today & Yahoo Video"



As Eurozone nations sink ever deeper into crisis, the UK Treasury is working on a contingency plan for the single currency's collapse. It includes capital control measures that, under EU rules, require agreement from most of the Union members. Britain is also prepared to close its borders and evacuate expats and holidaymakers from the effected countries. Robert Oulds, president of the Bruge Groups of campaigners against excess unification in Europe says many countries will benefit if euro collapses.

How The Oligarchy Gets Politicized

A Short History of Elite Responses To Political-Economic Crisis 

By ALAN NASSER 
NOVEMBER 15, 2011 
Courtesy Of "CounterPunch"

The performance of the US economy from the mid-1970s to the present was no match for its relatively robust performance during what  economists call the Golden Age – 1949 to 1973. This was in fact the longest period of sustained growth in US history, when most (white) working people had achieved a degree of material security unknown earlier and unattainable since. But from the late 1960s and through the 1970s economic malaise was increasingly in evidence, signaling worse to come: high rates of both inflation and unemployment  -stagflation- was not supposed to be possible in a Keynesian (1) world, but there they were, and seemingly intractable. At the same time workers’ productivity declined dramatically. Profit rates fell steadily for more than ten years as revived Japanese and European economic competitors increasingly ate into US manufacturing’s share of both world trade and the domestic market itself.

Corporate and political elites responded with the cold bath treatment. “The standard of living of the average American,” pronounced Fed chairman Paul Volcker on Oct. 17, 1979, “has to decline. I don’t think you can escape that.”  Interest rates went through the roof. Austerity was the order of the day, and it still is.

In 1983 an analysis of US decline and the ensuing rise of Thatcher-Reaganism appeared, in the book Beyond the Waste Land, by three Harvard-based radical economists  - Sam Bowles, David M. Gordon and Thomas Weisskopf. The book received favorable reviews in many mainstream media, including The New York Times and The New York Review of Books. Reviewers included the  distinguished US economists John Kenneth Galbraith, James Tobin and Kenneth Arrow.

The authors argued that a social-political factor of great importance figured crucially in the decline of US hegemony: workers had become more secure and therefore more emboldened by Keynesian New-Deal benefits like Social Security and unemployment insurance, and the labor-friendly social programs of Lyndon Johnson’s Great Society. Labor’s uppityness was especially striking in the 1960s and early 1970s. There was a notable increase in labor actions, from strikes to industrial sabotage. With fewer workers worried about where the next mouthful would come from, we saw an increase in goofing off on the job, tardiness, job-switching, pressure for improved workplace safety measures and demands for higher wages and benefits. The result was a decline in productivity (output per unit of labor input) and a wage-push profit squeeze.

Most importantly, the legacy of the New Deal and the Great Society had resulted in a shift in the distribution of national income from capital to labor.

Bowles, Gordon and Weisskopf argued that with effective unions and unprecedented security, labor had achieved a degree of power over capital hitherto unknown. This analysis has been developed more recently by the economists Jonathan Goldstein and David Kotz, who show that every Golden-Age recession was generated by a wage-push profit squeeze in the preceding expansion. According to Bowles, Gordon and Weisskopf, capital did not take this sitting down. Corporate America initiated a counteroffensive which the authors called the Great Repression. Capital’s counterattack, we may say, persists to this day.

Liberal Thinking About The Politics Of The Elite

Several of the most prominent liberal reviewers of Beyond the Waste Land were scandalized by the authors’ claim that capital deliberately organized active political resistance to working-class advances. In the New York Times (July 31, 1983) Peter Passell, who at the time wrote about economics for the Times’s editorial page, complained that the book exhibits an “emphasis on conspiracy.” John Kenneth Galbraith was far more insightful and dismissive of mainstream orthodoxy than liberals of a Paul Krugman or Robert Reich kidney. Yet he too could not imagine that the vested interests deliberately muster forces antithetical to working-class interests. In his otherwise generous praise for the book in The New York Review of Books (June 2, 1983) Galbraith registered a “serious complaint about the authors’ position on political power…. They see the present sorry behavior of the economy as the result of a thoughtful and deliberate exercise of corporate power.” Galbraith repudiated the authors’ “conviction that the present disaster is designed – that it reflects in a deliberate way the interest of the corporations. This I do not believe. I would attribute far more to adherence by the corporate world to outdated and irrelevant ideology, and to political leaders, not excluding the president, who do not know what damage they are accomplishing.”

It is as if acknowledging elites’ political activism gives credence to class analysis, which is thought to be too Marxian for our own good. Talk of corporate dominance of the State opens the door to unacceptably subversive reconceptualizations of matters we have been trained to understand in safer, less seditious terms. Seeing a recession as a strike of capital, for example, forces us to make the appropriate readjustments in a range of related economic and political understandings. Indeed, as Galbraith recognized, Beyond the Waste Land requires us to think and to act very differently regarding what political power is all about. It is less unsettling to imagine that “irrelevant ideology” and political ignorance lie at the heart of the current economic debacle, than it is to see the depression as the outcome of a deliberate assault on working people by the oligarchs.

These liberal objections are far less believable now than they were 28 years ago. Elites are not philosophers seeking to be guided by the most intellectually cogent theories. Political power is not about upholding this or that ideology; it is about legislating in this or that group’s interest. Political power is exercised most successfully by those whose interests are most consistently served by the exercise of State power.Cui bono? remains the best test of who matters most to the State managers. The latter govern; the former rule.

By this test only the blind fail to see that Wall Street is now running the show. The blind abound among liberal intellectuals. In his New York Times column on Nov. 23, 2009, Paul Krugman confesses that “It took me a while to puzzle this out. But the concerns Mr. Obama expressed become comprehensible if you suppose that he’s getting his views, directly or indirectly, from Wall Street.” You don’t say.

Krugman’s epiphany was available before Obama was elected. In September 2008, finance capital stepped forward, openly and unabashedly pushed aside its political representatives, and proceeded to dictate policy to the Congress and the White House. Hank Paulson demanded $700 billion for the banksters, with no strings attached: there would be no restrictions on how the handout was spent, no hearings, no Congressional debate, no expert testimony and Paulson was not to be held accountable. Obama suspended his campaign for a day to make phone calls urging Congressional Democrats to obey Paulson’s orders. His top economic advisors, his Treasury Secretary, his Fed chief, turned out to be mostly Wall-Street-linked deregulators. It was more than a year before it dawned on Krugman that Obama might be Charley McCarthy to Wall Street’s Edgar Bergen.

Elite Responses To Crisis

The political activism of the elite is striking in times of crisis, when the latter takes the form either of severe economic contraction or of working-class militancy, or both. Let’s look at the specifics.

The ruling class has attempted directly to address crisis situations in each of the three major economic downturn periods since 1823. I treat  nineteenth century American capitalism (1823-1899) as a single depression period, since over the course of sixty years it featured three steep depressions, 1837-1843, 1873-1878 and 1893-1897. Indeed, the entire period 1823-1898, excluding the Civil War, saw the nation in recession or depression more often than not. The Great Depression of the ‘30s was of course the second such period, and the years from late 2007 to the present constitute the third.

The corporate oligarchy has also responded to the New Deal/Great Society Golden Age as another crisis period, this time of a special kind. In that case the crisis was not perceived by the elite as purely economic, but as political, involving a transfer of both income and power from the wealthiest to the rest. Ruling-class mobilization ensued. The plutocrats openly “put politics in command.” Neoliberalism began to take shape.

After a brief review of the plutocrats’ responses to the depression periods and the Golden Age, I will look more closely at the stretch of time from the mid-1970s to the end of the twentieth century as a prolonged insurgency of the vested interests against regulated and relatively-worker-friendly American capitalism, and as a buildup to the current mess.

We begin with the corporate class’s first modern historical attempt to coordinate its power as a class. This was an effort initially confined to the economic sphere. Once the elite had established a private regime of market collaboration, it became clear that subsequent threats to its interests would require political mobilization. What we face now is a ruling class politically organized as never before, and with a firm grip on State power.

The Nineteenth Century: Depression Paves The Road To Corporate Organization

Railways and steel epitomized the chronic economic instability of nineteenth-century US capitalism. In each case enterprises repeatedly competed their profits away into bankruptcy or receivership. Finance capital responded by pressuring its industrial counterpart to consolidate in order to avert the perpetuation of what was very close to three quarters of a century of sustained slump.

Keynes famously described a clear instance of irrational competition: “Two masses for the dead, two pyramids are better than one; not so two railroads from London to York.” In fact, in Britain and in the US the railroad magnates had repeatedly built two or more railways from A to B, with the predictable consequences: bankruptcies proliferated. By the end of the nineteenth century the giant railway networks were the largest business enterprises in the world, yet by 1900 half of them had gone into receivership.

The financial magnate J.P. Morgan was attuned to the contribution of fratricidal competition to recurring economic downturns and, not incidentally, to the attending threat to bank profits.  He persuaded the biggest railway barons to organize. He had them form “communities of interest” to reduce destructive competition by fixing rates and/or allocating traffic between competing roads. Most of these efforts failed; invariably at least one of the companies would try to take advantage of the others’ compliance by breaking its promise.

Morgan’s response was, in retrospect, epoch-making. He implored his real-economy counterparts to consolidate as a matter of policy. Consolidation, he urged, was the most effective antidote to cutthroat-competition-induced depression and falling bank profits. Concentration was in capital’s best interests. Practicing what he preached, Morgan took control of one sixth of the nation’s largest railroads.

The steel industry exhibited a similar dynamic. The superinnovator Andrew Carnegie introduced productivity-enhancing technological improvements with uncommon frequency. His high rate of capital replacement lowered his unit costs, raised his competitors’ costs and devalorized their obsolete capital, enabling him to price-compete many of them to bankruptcy.

This left bankers like J.P. Morgan with big debtors unable to service their loans. Cutthroat competition was again rightly perceived by Morgan as contrary to the interests of capital.

Carnegie was a special nuisance to Morgan, who repeatedly implored him to slow down his innovations. When Carnegie resisted, Morgan simply bought him out and consolidated the Carnegie Steel Company with some of its weaker competitors. In 1901 Morgan’s steel behemoth became US Steel. This gave precedent and impetus to the oligopolization of major industries that was to become a hallmark of twentieth century capitalism. Cutthroat price competition was replaced with “corespective” competition, effected mainly through advertising, new products, improved technology, and organizational change.

Morgan had become the nation’s first prominent active critic of cutthroat competition. His effort consciously to limit competition was the first historical attempt of a major ruling-class activist deliberately to intervene in the dynamics of the economy in response to viral bankruptcies and depression.

Morgan’s lessons are implicitly subversive. He instructed his industrial brothers that their individual interests are best realized by action in concert. Morgan understood that the most effective agent of capitalist success is not the individual but the class. The same of course applies to anti-capitalist success. This Morgan did not discuss.

Organized capitalism was strikingly different from its nineteenth-century ancestor, with one exception. In both periods economic liberalism persisted; government regulation was almost entirely absent. The absence of regulation was a major factor in precipitating both the Great Depression and the current severe downturn.

The Great Depression: Coup d’Etat As Response To The New Deal’s Politicization Of The State

J.P. Morgan’s response to crisis was to recommend to his class brothers a new form of industrial organization. The resulting reconfiguration of the private economy was accomplished with virtually no overt participation by the State, in accord with the prevailing laissez faire ideology. The notion that the State could respond to economic malfunction by active intervention  had not yet entered official thinking.

During the crisis of the 1930s the dominant orthodoxy was severely challenged. Morgan’s precedent for dealing with economic collapse generated by unbridled competition was that the Big Boys could put their own house in order by teaming up. By contrast, 1930s capital was without private, class-grown strategies adequate to the task of getting the Great Depression under control.

The seeds of the Depression had been planted in the 1920s, when the economic scene was strikingly similar to what precipitated the current downturn. Output, investment, productivity and profits rose much faster than wages. Unions were weak and inequality soared  -1928 was the then-record year for income inequality-  and working people relied heavily on debt to finance their purchase of the avalanche of newly available consumer durables. During the latter half of the decade economic growth was driven largely by credit-fueled consumption expenditures.

The unprecedented inequality that emerged from this setup widened the gap between productive capacity and effective demand and caused, beginning in 1926, a marked slowdown in the purchases of the very consumer durables   -radios, refrigeratots, toasters, automobiles-  on whose growth the health of the productive economy had become dependent. The growth rate of  manufacturing declined dramatically, and investment-seeking capital fled to speculative financial markets, ultimately inducing the crash of 1929. Sound familiar?

Reflecting on these realities, the Keynesians surrounding Roosevelt proposed the notion that the economy had reached “maturity” during the end-stage industrialization of the 1920s. All previous expansions out of downturns had been propelled by investment spending on means of production and workplaces; the nation was still industrializing. This time, and for the first time, it was different. Excess capacity abounded at the end of the decade, but not, as in the nineteenth century, as a result of serial bankruptcies. The triple blights of  inequality, over-investment and underconsumption were the culprits. With the basic industrial infrastructure now in place, and productive facilities glaringly superfluous, if the economy was to recover there had to be a resurrection of consumption demand. But the condition of the private economy ruled this out. This is what Keynes understood. His was a prescription for the economic restoration of a mature industrialized economy in the depths of a severe, sustained and self-perpetuating downturn.

The historical stage was now set for the birth of the Keynesian insight that only an agent outside the sphere of the market, and unmotivated by the quest for private profit, can restore a mature capitalist economy in deep depression. Many of FDR’s early “Brain Trust” were solid Keynesians, and the combination of their tutelage with mounting labor militancy convinced the president to initiate a major break with free-market precedent. He initiated a grand plan of public investment and government-provided jobs which not only brought about a reversal of the downward plunge of 1929-1933, but also generated the longest US cyclical expansion recorded up to that time, 1934-1938.

To the business class this seemed an unconscionably revolutionary turn. FDR’s fierce denunciation of the banksters even as he politicized the State in the name of working-class interests was viewed as an unparalleled and horrific development, a popular assault by the State on the power of Big Wealth. The logical response of the business class was not to attempt to reconfigure the private sector as Morgan had done, but to seek to capture the State, which it perceived as a greater threat to its dominance than the Depression itself. Morgan had attended to matters economic. But the emergence of a mature oligopolized form of economic organization required from the superordinates a distinctly political response.

The ruling elite proceeded in 1933 to organize a coup intended to topple the Roosevelt administration and replace it with a government modelled on the policies of Adolf Hitler and Benito Mussolini. (A 1934 Congressional committee determined that Prescott Bush, granddad of Dubya, was in communication with Hitler.) The plotters included some of the foremost members of the business class, many of them household names at the time. Prominent insurgents included Rockefeller, Mellon, Pew, Morgan and Dupont, as well as enterprises like Remington, Anaconda, Bethlehem and Goodyear, and the owners of Bird’s Eye, Maxwell House and Heinz. About twenty four major businessmen and Wall Street financiers planned to assemble a private army of half a million men, composed largely of unemployed veterans. These troops would constitute the armed force behind the coup and defeat any resistance the in-house revolution might generate.

The revolutionaries chose Medal of Honor recipient and Marine Major General Smedley Butler to organize its armed forces. Butler was appalled by the plot and spilled the beans to journalists and to Congress. FDR nipped the thing in the bud.

The attempted coup was a landmark event in US history, baring the soul of America’s standing wealth. (We find no mention of this event in US history textbooks. History unfit to print.) We have no reason to think that these fascist instincts have been expunged from the class character of our rulers. No less important, the scandal alerts us to the elite’s Leninism, its identification of the State as the political prize of prizes, the seat of class power.

Ironically, it was Keynes who put the deliberate capture of the State on postWar capital’s agenda. 1930s Keynesianism saw the State legislating in the interests of working people, and successfully competing in the labor market with private companies. This was an explicitly politicized State functioning, in the eyes of the elite, as the executive committee of the working class.

Big capital learned a lesson of abiding importance: determining State power must be their deliberate and overriding political agenda. Siezing State power by force of arms, they had learned, is easier planned than accomplished. The final years of the Golden Age saw the captains of wealth devising a longer-term political strategy to roll back the New Deal and Great Society, and to set in place arrangements that would preclude their recurrence. This time it was to be a New Deal for capital, a State unabashedly politicized for the class that counts. These were the early formative years of neoliberalism.

The Golden Age Not So Golden For Capital

The Golden Age is distinguished by its remarkable growth rate and the unprecedented material security enjoyed by a good number of workers. But growth rates tell us nothing about how the fruits of growth are distributed. The present moment illustrates this nicely. The economy’s rate of growth has been very slow, while corporate profits and the income of the top .01% have reached record highs. Ring this up to a deliberate, policy-driven transfer of income and wealth from the rest to the richest. Distribution counts a lot for the wealthy. Their political power is a function of their wealth. If wealth and/or income is redistributed to another class, so is power. That goes down badly with rulers.

The New Deal/Great Society period saw increasing redistribution from capital to labor. The share of national income appropriated by the top 1% of households steadily declined during those years. In 1928, the most unequal year to date since 1900, the share of the top 1% stood at more than 23%; by the late 1930s it was down to 16%. It declined to 11-15% in the 1940s, to 9-11% in the 1950s and 1960s, and finally fell to its nadir of 8-9% in the 1970s.

This was the first 50-year redistribution of income from the very richest to the rest in American history. The oligarchs were to take steps to ensure that this would never happen again.

Elites saw redistribution as inherent in any State policy orientation distributing toward working people benefits which the market by itself would not produce. If you give them a little, little by little they’ll want it all. To the boys used to being in charge, Lyndon Johnson seemed to be responding to popular pressure to out-New-Deal the New Deal. The latter had given us Social Security; Johnson expanded the program to include disability payments and more. Johnson and a Democratic Congress passed new or strengthened laws, mainly around consumer and environmental issues, that cut into business profits by forcing corporations to absorb some of the costs they had previously externalized onto the rest of us.

In less than four years Congress enacted the Truth In Lending Act, the Fair Packaging and Labeling Act, the National Traffic and Motor Vehicle Safety Act, the National Gas Pipeline Safety Act, the Federal Hazardous Substances Act, the Flammable Fabrics Act, the federal Meat Inspection Act and the Child Protection Act. Whew.

Business-government relations had never before seen such an avalanche of legislation limiting the freedom of capital in the interests of working people.

Between 1964 and 1968 Congress passed 226 of 252 worker-friendly bills into law. Federal funds transferred to the poor increased from $9.9 billion in 1960 to $30 billion in 1968. One million workers received job training from these bills and 2 million children were enrolled in pre-school Head Start programs by 1968.

What made all this especially unnerving in the eyes of Big Wealth was that even the Republicans seemed to have swallowed the redistributionist line. Richard Nixon announced in 1971 “I am now a Keynesian in economics” (not “We are all Keynesians now”, as the remark is usually misquoted). Nixon was in fact a bigger domestic non-military spender than Johnson. During his first term in office Congress enacted a major tax reform bill, the Environmental Protection Agency along with four major environmental laws, the Occupational Safety and Health Administration and the Consumer Products Safety Commission.

The combination of regulation and redistribution left  the working class as materially secure as it had ever been, and more inclined to feel its oats. When the economy began to approach full employment, toward the peak of a Golden-Age expansion, workers’ slacking off, tardiness, job switching and general militancy increased. The US topped the OECD’s table in strikes per worker in 1954, 1955, 1959, 1960, 1967 and 1970.

This did not go unnoticed by business. Commenting on the causes of the 1970-1971 recession following the long expansion of the 1960s, a front-page Wall Street Journal article (January 26, 1972) noted that:

‘Many manufacturing executives have openly complained in recent years that too much control had passed from management to labor. With sales lagging and competition mounting, they feel safer in attempting to restore what they call “balance”.’

It’s hard to overestimate the impact of  new regulations, redistribution and labor militancy on business. Regulations are a class thing, and we shall see how they inspired the regulated to respond in self-defense as a class. We might begin by contrasting neoliberal anti-Keynesianism with the standard postwar efforts of business to influence government.

To the extent that business sought to mobilize before neoliberalism, its tactics were fragmented and limited in scope. The airline industry would lobby the Civil Aeronautics Board and/or bribe a favorite senator (e.g. Washington state’s Scoop Jackson, the “Senator from Boeing”), steel companies would lean on Congress for protectionist legislation, energy producers got tax breaks from their congressional favorite, and firms would target trade organizations. Much of this was done through personal contacts. Individual firms and specific industries had their own strategies; there was no cross-sectoral means of resistance to threats to business as a whole. But it is the nature of regulations to pose just such threats by affecting many industries at once. It is no surprise, then, that business should respond with a call for a new form of class mobilization, an all-business attempt to secure State power by political means less dramatic, though no less effective, than an out-and-out coup.

The Counterrevolt Of Capital: The Legacy Of The Powell Memo

Toward the end of the nineteenth century Morgan had urged industrial capital to organize itself within the private sector. During the Great Depression big capital galvanized its energies politically, in a coup attempt to sieze State power. The next major effort by business to coordinate and mobilize itself was also a political action, again aimed at control of the State apparatus, but this time with a strategy of methodical long-term class warfare.

In 1971 future Supreme Court justice Lewis Powell distributed among business circles a memo intended to politicize the captains of industry in resistance to the legacy of the New Deal and Great Society. The memo reads like a neoliberal instruction booklet:

“[the]American economic system is under broad attack. Business must learn the lesson…that political power is necessary; that such power must be assiduously cultivated; and that when necessary, it must be used aggressively and with determination – without embarrassment and without the reluctance which has been so characteristic of American business…. Strength lies in organization, in careful long-range planning and implementation, in consistency of action over an indefinite period of years, in the scale of financing available only through joint effort, and in the political power available only through united action and national organizations.”

In their remarkable book Winner-Take-All Politics, political scientists Jacob Hacker and Paul Pierson describe the organizational counterattack of business as “a domestic version of Shock and Awe.” The accomplishments are impressive:

“The number of corporations with public affairs offices in Washington grew from 100 in 1968 to to over 500 in 1978. In 1971, only 175 firms had registered lobbyists in Washington, but by 1982, nearly 2,500 did. The number of corporate PACs increased from under 300 in 1976 to over 1,200 by the middle of 1980. On every dimension of corporate political activity, the numbers reveal a dramatic rapid mobilization of business resources in the mid-1970s.”

This period also saw the birth of militant mega-organizations representing both big and small business. In 1972 the Business Roundtable was formed, its membership restricted to top corporate CEOs. By 1977 the Roundtable’s membership included the CEOs of 113 of the top Fortune 200 companies. The chairman of both the Roundtable and Exxon in the early Reagan years, Clifton Garvin remarked “The Roundtable tries to work with whichever political party is in power… as a group the Roundtable works with every administration to the degree they let us.”

The Conference Board further sharpened capital’s political focus by gathering leading executive especially well positioned to personally contact key legislators. The Board developed an ingenious agenda: to learn the tactics of public interest groups and organized labor in order to subvert the agenda of those very groups.

The Roundtable and the Board lobbied and established ongoing relationships with Congressional staffs. Organizations representing smaller firms also grew rapidly in the 1970s. With higher unit costs and no oligopoly pricing power to offset the administrative costs of regulation, these firms were highly motivated to mobilize. The Chamber of Commerce and the National Federation of Independent Businesses doubled their membership, with the now very effective Chamber tripling its budget.

It was during this period that the corporate presence on the Hill became conspicuously ubiquitous. While business had always been disproportionately represented in DC, never before had the chambers of legislation seen such thoroughgoing corporatization.

Corporate strategy was not merely a matter of bribing top politicos. The biggest organizations had learned their lessons well from their antagonists, the public interest groups pressing the popular demand for regulation, and organized labor. The business counterrevolt mimicked the strategies of those groups. Corporate groups used their ample resources, including sophisticated marketing and communications techniques, to organize mass campaigns composed of a heterogenous grouping of shareholders, local companies, employees and mutually dependent firms like retailers and suppliers. Washington would be deluged with phone calls, petitions and letters pushing business interests.

In short order elites surpassed both public-service organizations and organized labor in what they had done best, bottom-up organizing.

Within ten years the corporate takeover was well established. In the 1980s corporate PACs shelled out five times as much money to congressional campaigners as they had put out in the 1970s.

The agenda of the political infrastructure of rallied capital was to undo those policies and State priorities which had generated the redistribution and labor activism limiting the freedom of capital and enhancing the power of workers for almost three decades. In sum, the legacy of the New Deal and Great Society had to be undone. But these were political-economic projects which required ongoing bolstering by the State if they were to be kept effective. Mobilized capital had to capture the State and render it inoperative for proletarian purposes. The State had to be as explicitly reconstituted as a capitalists’ State as the elite perceived it to have been hitherto rigged for workers and against the Big Boys. This required the functional equivalent of a coup.

And a coup there was. Simon Johnson, former chief economist of the International Monetary Fund, wrote in one of the nation’s major weeklies of the “the reemergence of an American financial oligarchy” in “The Quiet Coup”, The Atlantic (May 2009). Johnson made it clear that his use of “coup” was not intended as a rhetorical flourish or a metaphor. Finance capital had effectively privatized the State. Neoliberalism had succeeded not merely in guaranteeing permanently reactionary governments, it had captured the State itself. Previously, a change in government  -e.g. from the Eisenhower to the Kennedy administration- might mean a significant change in domestic policy within the context of an abiding Keynesian State. Neoliberalism has sought to change the fundamental priorities of the State.

Mission Accomplished: The Privatized Neoliberal State

All of the major developed capitalist countries have deindustrialized over the past thirty years. The industrial capacity of the West is overripe, and widget production has accounted for a declining share of total output, total employment and total profits in these once-democracies. FIRE’s shares have correspondingly risen, and its top dogs now rule the roost and call the global shots. This has gone hand in hand with a string of financial crises. (2) This setup requires much more, not less, State implication in economic life.

To bail out or not to bail out – and who is to be rescued at whose expense? How is manufacturing to thrive in the current climate of intensified competition among deindustrialized developed countries, with the emerging markets poised to enter the fray? The present answers to these questions are clear. The financial elite get everything while manufacturing is “restructured” as a low wage sector targeting the world’s fastest growing markets, which are not to be found in the imperial metropoles. Unemployment rates are to be kept high until the wage level drops low enough to render the US an effective competitor in global markets. None of this could begin to get off the ground without massive State collusion with corporate interests. The financial bailout and Obama’s restructuring of the auto industry are but the most conspicuous of many examples. The new State is to become  -has become?-  a capitalist State not in the trivial sense of the State of a capitalist country, but as a State unambiguously by and for Big Wealth.

Putting The Class Character Of The State On The Political Agenda

The government is not the same as the State. The governmental alternatives -Republican or Democrat- within the context of an anti-Keynesian neoliberal State must be so limited as to count as no alternatives at all. That there is not a dime’s worth of difference between the Parties is what we should expect, given the dismantling of the State’s postwar social functions. If the remnants of the New Deal and Great Society are regarded by the State managers as “the old time religion”, as Obama characterized them in The Audacity of Hope, then the policy alternatives must be, from the perspective of working-class interests, piddling, and the pseudo-squabbles between the Parties inconsequential.

The historical unfolding of American capitalism has put the class character of the State squarely on the political agenda. It has been the plutocracy’s top priority for a long time. It is clearer to more Americans than ever that the entire political establishment is unprepared and unwilling to manage the economy and the State in the interests of working people. The ruling-class concerns of the neoliberal State homogenizes policy options and renders standard Party politics otiose and obsolete. An effective Left political program must make available to its constituency a radically revised conception of what it means to do politics. No less important is the forging of a political practice which compellingly incarnates that radical reconception. An independent OWS is just what such a practice would look like in its embryonic stages. Very much hinges on how that movement develops.

Notes.

(1) References to Keynesian policy require the reminder that Keynes encouraged economic policy far more radical than what the New Deal and Great Society offered. Perhaps the most neglected Keynesian prescription is his insistence that fiscal policy and government employment are not tools confined to recessions. Keynes held that full employment required ongoing targeted government stimulus, even during cyclical upturns.

(2) Savings and loans (early 1980s), Mexican debt crisis (1982), Mexican peso crash (1994, one year after the passage of NAFTA), Asian Financial Crisis (1997), Russian devaluation and default (1998), Argentina’s eebt crisis (2001), Enron (2001), Worldcom (2002), the hi-tech, dot.com bubbles of the late 1990s and the present turmoil, unparalleled of its kind in the history of capitalism.

Alan Nasser is Professor Emeritus of Political Economy at The Evergreen State College in Olympia, Washington. This article is adapted from his book in progress, The “New Normal”: Chronic Austerity and the Decline of Democracy. He can be reached at nassera@evergreen.edu