Back in the 1990s, a colleague in Beirut mused that “in the Soviet Union, capitalism destroyed communism. In the United States, capitalism will destroy democracy.” Prophetic words, it seems, as we survey a global landscape of social, moral, and ecological ruination two decades later. When the Soviet Union fell, celebratory discourses about the dawn of a new world order, and even—according to American scholar Francis Fukuyama—“the end of history,” implicitly equated free markets with political freedoms. Creating new markets, accruing new wealth, and enjoying new consumer goods was supposed to transform the world for the better, according to mainstream American academics and policymakers wedded to neoliberal ideologies. But “free markets” are not really free, and despite the uncritical assumption that it would automatically foster democratic freedoms, global market capitalism as it exists today has become a destructive force, laying waste to communities, public health, networks of solidarity, and even the planet’s rainforests.

Of course, capitalism comes in many forms, but the way it has developed in the United States over the last 30 years highlights the dangers of rampant deregulation, tax breaks for the wealthiest, and a “bottom-line” mentality. Corporations used to attend, however minimally, to the concerns and needs of their stakeholders—workers, customers, the surrounding communities, and some public services. Since the 1980s, however, shareholders have become kings. Maximizing shareholder value means that profits for those who neither work in nor live near a corporation’s base of operations are a CEO’s most pressing concern. This has led to a downsizing of the workforce—if not to wholesale off-shoring of production and manufacturing to countries lacking labor and environmental protection laws. Unions have been eviscerated, and the growing ranks of part-time employees don’t enjoy health and retirement benefits.

The imbalanced ratio between workers’ and CEOs’ salaries has become obscene. CEO compensation has increased by 940 percent since 1978, while workers’ salaries have barely kept up with cost of living increases.  In the 1960s, CEOs earned roughly 20 times what their workers did. Now, the average CEO-to-employee pay ratio is 300:1.  Similar trends are evident in academia, where many university presidents earn six- and seven-figure salaries while adjunct professors, most earning only $4000 per semester (and lacking any health or retirement benefits), are now teaching over half of America’s college courses. Fifty years ago, the American middle class was comparatively robust. One salary could meet the needs of a family of four adequately. The rule-of-thumb that one should spend no more than one fourth of his or her monthly paycheck on housing (either rent or mortgage payments) was not difficult to achieve. Now, according to a national survey, there is not a single metropolitan area in the United States where an individual making a minimum wage salary can afford to rent or buy housing. In the hotbeds of the new cyber-economy—San Francisco and Seattle—housing prices have surged dramatically, giving rise to a new phenomenon: the working homeless.

The growing gap between America’s haves and have-nots is detrimental to democratic governance in at least two ways. First, citizens struggling to make ends meet by juggling two or more jobs don’t have time to analyze, think about, or discuss economic and political dynamics that impact them and their families profoundly. Some Americans can’t even take time off from work to go to the polls on election day. Public debate and solidarity building to attain communal ends are luxuries that far too many stressed-out American workers cannot afford. Everyone has to work more than 40 hours per week now. We can’t rest or simply enjoy life; worries about bills, debts, children’s futures, and unforeseen medical expenses are constant and exhausting. Most Americans are only three paychecks away from homelessness, and saving for the future or emergencies is nearly impossible, especially for those paying off immense student loan debts.

Secondly, the rapid rise of a billionaire class over the last three decades has given us a government not of, by, and for the people, but rather, a government dictated and deformed by big money. No better indication of this can be found than the Supreme Court’s 2010 ruling in the Citizens United v. Federal Election Commission case that money (unlimited campaign contributions) equals free speech. Congress is no longer elected: it is bought. Following the death this week of U.S. billionaire David Koch (who, along with his brother Charles, personified the toxic impact of big money on the U.S. political process, the corruption of academe, and climate change denial), a witty person on Twitter asked “When a billionaire dies, who inherits his senators?” Another Twitter wit replied that perhaps the purchased senators ought to be buried alongside the deceased billionaire, just like servants were entombed with Pharaohs in ancient Egypt.

Even after the 2008 financial crash on Wall Street and the angry and frustrated reaction of working class Americans who lost their life savings, the financial sector continues to dominate U.S. politics with impunity. Wall Street banks and firms were “too big to fail,” and got bailed out of the disaster they’d created at U.S. taxpayers’ expense a decade ago. Few if any checks and balances were instituted to prevent another market crash. The Academy Award winning 2010 documentary, “Inside Job,” provided a damning analysis not only of how the crash happened, but also revealed that the beliefs, values, practices, personnel, and world views that produced the financial crisis haven’t changed much at all. The film addressed the systemic corruption of the United States by the financial industry and the consequences of that systemic corruption, not just on Wall Street, but throughout all of America’s social and governance institutions that should have been, but were not, capable of halting the crash.

But times might be changing. On August 19, 181 American CEOs committed to lead their companies “for the benefit of all stakeholders—customers, employees, suppliers, communities and shareholders.” The CEOs announced this by signing the Business Roundtable’s new “Statement on the Purpose of a Corporation,” which represents a potential threat to the prevailing notion that a corporation’s primary purpose is to enrich its shareholders. Time will tell if this is simply a public relations ploy or an actual sea change in U.S. capitalism.  Either way, American democracy hangs in the balance.

(Read the Arabic version of this article here.)

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