Class Warfare

We are watching the markets - dominated by the wealthy - bidding up desperately needed food stocks and gasoline beyond the reach not only of the poor nations, but beyond that of moderate incomes. The same markets bid up houses and properties in general until the bubble burst, leading to an economic upheaval worldwide. Now they are being asked to get us out of the mess. So we hear from an author, David Rothkof, that I talked about recently, talking about that 'Superclass' that dominates the globalization cadre.

Doubt it? Just look at the current financial crisis. As government regulators have sought to head off further market losses, they've found that perhaps the most effective tool at their disposal is what the president of the New York Federal Reserve Bank described to me as their "convening power" -- their ability to get the big boys of Wall Street and world financial capitals into a room or on a conference call to collaborate on solving a problem. This has, in fact, become a central part of crisis management, both because national governments have limited regulatory authority over global markets and because financial flows have become so large that the real power lies with the biggest players -- such as the top 50 financial institutions that control almost $50 trillion in assets, by one measure nearly a third of all assets worldwide.

Most major companies are both bigger and more global today, which effectively makes them able to pick and choose among various governments' regulatory regimes or investment incentive programs. They play officials in country X against those in country Y, gaining leverage that makes the old rules of trade obsolete. The world's biggest corporations, such as Exxon or Wal-Mart, have annual sales (and thus financial resources) that rival the gross domestic product of all but the 20 or so wealthiest nations. The top 250 companies in the world have sales equal to about a third of global GDP (these are very different measures, but they give a rough sense of relative size).
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In a world with only two kinds of international institutions -- weak and dysfunctional -- the members of this superclass are filling a power vacuum when it comes to influencing decisions about transnational issues such as financial-market regulation or climate change. (Many countries voted for the Kyoto accords on global warming, but it took just Exxon and a handful of other oil companies to successfully lobby the White House to opt out and undercut the entire initiative.) In so doing, they raise real questions about the future of global governance. Will the global era be more democratic or less so? Will inequality continue to grow, as it has for the past three decades of this group's rise, or recede? Will the few dominate because the government mechanisms that traditionally represent the views of the many are so underdeveloped on a global scale?
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Growth is taking place, but it is disproportionately benefiting the few. And there's a sense that the issue of class conflict, confined not too long ago to the ash heap by our (premature) celebration of the "end of history" after communism's fall, remains with us.

A backlash is inevitable. Are these elites especially talented? Hard-working? Lucky? Some are all of these things. But conspiracy theories don't hold water in a group whose members are so diverse and self-interested. Still, when their self-interests align to cause them to act together, they can be hard to resist. They often get their way -- and thus often get much more than the rest of us. And that leads to angry reaction. "When a CEO is making more in 10 minutes than an ordinary worker's making in an entire year . . . something is wrong, something has to change," Sen. Barack Obama declares on the stump. Sen. Hillary Rodham Clinton chimes in that "it is wrong that somebody who makes $50 million a year on Wall Street pays a lower tax rate than somebody who makes $50,000 a year." (Emphasis added.)

Notice that conspiracy theory pop up all of a sudden? This kind of throws me, and suggests that the author has been aiming at class warfare, the strawdog itself, throwing it back at the ones fighting for us DFHs and workers. But as I enjoyed in the earlier post about the superclass, this is some one who is handing out his card as the very agent to introduce you into that very superclass.

It's a good perspective to have, the loss of power and influence to a ruling elite for our former other partner, the government. Indeed, we are watching a government wipe itself out under the worst administration ever, literally 'starving the beast' by replacing public servants with industry representatives and relocating the nation's coffers to the financial institutions here and elsewhere from the treasury. It's a conspiracy, one that was entered into industriously in the Reagan era. Of course, he is idolized by the right wing. Following in the wake of the belief that business is our beneficent hope, the masses can't be trusted with their own resources, this is the outgrowth of reaction to power and wealth being accessed - not redistributed from rulers and kingdoms to the great unwashed - by that powerful middle working class.

And how has that worked out?

The world is faced with global tragedy. That is the result of the 'superclass' domination.

The superclass is the most damaged by the destruction of regulation and the rule of law. It needs as much as the world does to return democratic principles and democratic powers.