Suddenly, all pundits are predicting the death of ‘liberal democracy’ – liberal in a classical sense of open markets, small government, free trade and a raising middle class. The Ivy League elite is pointing to the People’s Republic of China and forecasting the resurgence of ‘authoritarian capitalism’ – more popularly known as fascism in the tradition of Mussolini, Hitler and Franco. If you read the brilliant 90th Anniversary Edition of Foreign Affairs, The Clash of Ideas, the recurrent theme is that ‘liberal democracy’ is losing its vitality because it is not preserving the class for which it was created, the middle class.
Essays on the subject are appears with increasing frequency in establishment publications such as the New York Times, Wall Street Journal, Financial Times and The Economist. They give credit to Franklin Roosevelt and Lord Keynes for prolonging the era of liberal capitalism with the New Deal and its social safety net, but with an aging population and unaffordable old age pensions and health care, the stop-gap ‘social market economy’ is collapsing under a mountain of debt and unfunded mandates.
In the same breath, they lament the flaws of ‘plutocratic democracy’ as it has been practiced in the Anglo-Saxon world since Ronald Reagan and Margaret Thatcher, the so-called Austrian School with its creed of ‘greed is good’, globalization, deregulation and the Laffer curve. Plutocratic democracy, it appears, has created income inequity on a scale that is unsustainable. The remarkable thing about these musings of the East Coast intelligentsia and the interns ghost writing for the hedge fund moguls is that these same persons were secure in their Hayekian world view right up to and most of the way through the Great Recession. It is only with the rise of Occupy Wall Street and its message of inequality that the 1% is sensing that its way of life may be threatened by angry mobs of Ron Paul libertarians touting the Second Amendment or anarchistic hackers wielding MacBooks.
What the East Coast establishment has suddenly grasp is that fewer and fewer people have a stake in the current system and the middle class is getting squeezed into oblivion. Yet the timing is curious. These trends have been going on for years just like the accumulation of government debt in Greece or the melting glaciers near Davos. Perhaps there was an epiphany at the Skull and Bones summer retreat or the Arab Spring reminded them that democracy is only as benevolent as the values and intentions of the majority.
Yesterday, in the Financial Times, a prominent columnist commented that he and those around him have run out of ideas. With the neo-liberalism orthodoxy in tatters due to the Fiscal Crises [regardless of Meryl Streep’s fleeting appeal as Margaret Thatcher] the elite is sitting on its hands waiting for the new consensus to emerge — but what if that new consensus is ‘authoritarian capitalism’ as practiced in the booming economies of China, Russia and the United Arab Emirates. Foreign Affairs points out in a number of its essays on The Clash of Ideas that National Socialism too was a movement of a downwardly mobile and hopeless middle class. Accordingly to the political economists, the appeal of authoritarian capitalist is that it combines the productive dynamism of capitalism with the stability and full employment of totalitarianism. They wonder if Germany and Japan lost WWII because their authoritarian capitalist system of government was inferior or because they lacked the human and natural resources of the United States and Russia? Apostates.
As a true believer in liberal democracy and its soft parade of bad television and consumerism, I expect the new generation of political scientists to restructure government and, by extrapolation, the economy by focusing solely on the interests of the middle class – defined by the US Government as those households between the 30% and 70% percentile of gross income. Actually, I think that the official definition is part of the problem and prefer Francis Fukuyama’s definition of “people who are neither at the top nor at the bottom of their societies in terms of income, who have received a secondary education and who own either real property, durable goods or their own businesses”. Under his definition, most people that the man in the street thinks of as middle class would be included, including everyone from the 40th percentile to the 90th percentile – the respectable segment of society, college professors, first responders and small businessmen.
Empowering the middle class – the 40th through 90th percentile – would be a simple task. All that is needed is another amendment to the Constitution that changes the way Senators are picked. Remember that originally the Senate was chosen by the State Legislatures and it was only elected directly per the 17th Amendment passed in 1913. Passing a 28th Amendment that would only allow middle class voters to elect the Senate would restore the proper class balance to the Federal Government. ‘The Most Exclusive Club’ could, once again, perform the function for which was originally designed –protect our middle class republic from the proletarians in the House [what a mess they have made this year], the aristocrats in the executive and judicial branches and the plutocrats in the Federal Reserve. After all, the Senate is most powerful body in the Federal Government. It must approve all legislation and all appointments to executive and judicial office, except the President and recess appointments, but including the Supreme Court and Federal Reserve. It is time to end one man / one vote and transfer the power back to the middle class where it belongs.
P.S. Special thanks to Ben Sterne, age 16, who inspired this article and recommended the Tennis Court Oath as its visual theme.