With the trend of recent posts I feel it’s a propitious moment to resume our examination of power.

Capital has come to be the preeminent power in the US. And by capital I mean the corporations, banks, trusts and assorted financial entities, owned by the oligarchs, which composes American capitalism. Meanwhile, the vast majority of Americans, including members of the professional/managerial/class, make a living by selling their labor to an employer (Capital), making this the most important power relationship in their lives. However, thanks to the dedicated efforts of classical and now neoliberal economists this dynamic is considered economic instead of the most important political issue.

I’m reading a new book–Capital Control: How Economists Invented Austerity and Paved the Way to Fascism, by Clara Mattei, which details the history of austerity and demonstrates that neoliberal capitalism is just the latest itineration of liberal capitalism, as well as a successful counterattack against the New Deal, meant to reestablish capital control. In the words of the late Mark Fisher, “It is easier to imagine the end of the world that to imagine the end of capitalism.”

We think of austerity as a new set of policies but Mattei explains that austerity has been a cudgel used to discipline workers for over a century. “Economic experts, whether fascist or liberal recognized that in order to secure economic freedom–ie., the market freedom of the “virtuous” saver/entrepreneur–countries had to forgo, or at minimum marginalize, political freedoms.”

Indeed, Mattei’s examination of the conditions of capitalism in England and Italy during WWI, reveal the political nature of the “free market” and demonstrate that there’s nothing natural about it. “In sum, the war brought about an unprecedented degree of state control over labor. Insetting the price of labor, disciplining it, and controlling its supply, the Italian and British governments had exposed the profoundly political nature of the capitalist economy…The basis was set for those who were living through these changes to gain awareness of the link between economic power and political power. The full consequences were cropping up: if economic power is political, it means there is nothing natural about economic power, and the systems by which it is distributed can be changed through struggle.”

At the end of the WWI all of these contradictions brought about a crisis of capitalism. Mattei says that after the war many bureaucrats, politicians and intellectuals had been converted to belief in the benefits of nationalization and envisioned it as a long-lasting structural change. “The involvement of the state showed the irrationality of the market–that it was wasteful and anti-social.” Be that it may but the capitalists in England and Italy were the most powerful class and soon mounted a ferocious counterattack that reestablished capital control with the aid of classical economists who used austerity as their weapon of choice.

Neoliberalism advocates much more state involvement than laissez faire to nurture and protect an economic system dominated by markets but the modern state, wether liberal or fascist, has always favored the capitalist order. After all, capitalism is more than an economic arrangement. It’s system of social order.

What Mattei details is a familiar story that I have witnessed in my lifetime. American capitalists similarly mounted a successful counterattack against the US government’s uneven attempt to level the playing field between capital and labor that the New Deal represented. Moreover, the fact that capitalists have been so successful points to the power that they wield in American society. The unwelcome reality is that as a result of capitalist counterattack, the economic and financial policies since have transferred $50 trillion from labor to politically powerful capital. If this doesn’t seem possible, please read the RAND study in its entirety: Trends in Income From 1975 to 2018.

You know, it’s quite interesting because I’m old enough to remember Obama-Biden back in 2008-2012, and they were talking about that, “we as Democrats support a redistribution of wealth. And at the time, it was assumed that this redistribution of wealth would be from upper income to lower income brackets. But now it seems that the redistribution of wealth is going the other way around, taking from the poor to give to the rich.

That’s what politics is all about in America. It’s about economic power. Voting and elections are just a small part of the ongoing struggle, while unfortunately economic matters are kept far away from the electorate.

And that just how the capitalists like the American political system especially the legalized bribery campaign funding mechanism codified by Citizens United. If you look at the donor class, who are the donors? The donors are the wealthy, the beneficiaries of government policy. The brutal reality the RAND study articulates is that over the past several decades, and especially over the past ten years, since the 2008 crash, we’ve seen the US slowly transform into a financial oligarchy.

What is important for all of them is the maintenance of a political and economic climate that allows for Capital’s permanent profiteering.

Paraphrasing Kevin Spacey in–The Usual Suspects–the best trick that Capital pulled was convincing us that capitalism is the natural state of man rather than a political construct serving a narrow strata of oligarchs that can be changed.