From David Harvey's A Brief History of Neoliberalism
Part 6 - How the big capital neoliberalized politics and put the foundations of the bipartisan dictatorship in the United States of 70s
In order to realize this goal, businesses needed a political class instrument and a popular base. They therefore actively sought to capture the Republican Party as their own instrument. The formation of powerful political action committees to procure, as the old adage had it, ‘the best government that money could buy’ was an important step.
The supposedly ‘progressive’ campaign finance laws of 1971 in effect legalized the financial corruption of politics. A crucial set of Supreme Court decisions began in 1976 when it was first established that the right of a corporation to make unlimited money contributions to political parties and political action committees was protected under the First Amendment guaranteeing the rights of individuals (in this instance corpor- ations) to freedom of speech.
Political action committees (PACs) could thereafter ensure the financial domination of both political parties by corporate, moneyed, and professional association interests.
Corporate PACs, which numbered eightynine in 1974, had burgeoned to 1,467 by 1982. While these were willing to fund powerful incumbents of both parties provided their interests were served, they also systematically leaned towards supporting right-wing challengers.
In the late 1970s Reagan (then Governor of California) and William Simon (whom we have already encountered) went out of their way to urge the PACs to direct their efforts towards funding Republican candidates with right-wing sympathies. The $5,000 limit on each PAC’s contribution to any one individual forced PACs from different corporations and industries to work together, and that meant building alliances based on class rather than particular interests.
The willingness of the Republican Party to become the representative of ‘its dominant class constituency’ during this period contrasted, Edsall notes, with the ‘ideologically ambivalent’ attitude of the Democrats which grew out of ‘the fact that its ties to various groups in society are diffuse, and none of these groups –– women, blacks, labour, the elderly, hispanics, urban political organizations –– stands clearly larger than the others’.
The dependency of Democrats, furthermore, on ‘big money’ contributions rendered many of them highly vulnerable to direct influence from business interests. While the Democratic Party had a popular base, it could not easily pursue an anti-capitalist or anti-corporate political line without totally severing its connections with powerful financial interests.
The Republican Party needed, however, a solid electoral base if it was to colonize power effectively. It was around this time that Republicans sought an alliance with the Christian right. The latter had not been politically active in the past, but the foundation of Jerry Falwell’s ‘moral majority’ as a political movement in 1978 changed all of that.
The Republican Party now had its Christian base. It also appealed to the cultural nationalism of the white working classes and their besieged sense of moral righteousness (besieged because this class lived under conditions of chronic economic insecurity and felt excluded from many of the benefits that were being distributed through affirmative action and other state programmes).
This political base could be mobilized through the positives of religion and cultural nationalism and negatively through coded, if not blatant, racism, homophobia, and anti-feminism. The problem was not capitalism and the neoliberalization of culture, but the ‘liberals’ who had used excessive state power to provide for special groups (blacks, women, environmentalists, etc.).
A well-funded movement of neoconservative intellectuals (gathered around Irving Kristol and Norman Podhoretz and the journal Commentary), espousing morality and traditional values, gave credence to these theses. Supporting the neoliberal turn economically but not culturally, they excoriated the interventionist excesses of a so-called ‘liberal elite’ –– thus greatly muddying what the term ‘liberal’ might mean. The effect was to divert attention from capitalism and corporate power as in any way having anything to do with either the economic or the cultural problems that unbridled commercialism and individualism were creating.
From then on the unholy alliance between big business and conservative Christians backed by the neoconservatives steadily consolidated, eventually eradicating all liberal elements (significant and influential in the 1960s) from the Republican Party, particularly after 1990, and turning it into the relatively homogeneous right-wing electoral force of present times.
Not for the first, nor, it is to be feared, for the last time in history has a social group been persuaded to vote against its material, economic, and class interests for cultural, nationalist, and religious reasons.
In some cases, however, it is probably more appropriate to replace the word ‘persuaded’ with ‘elected’, since there is abundant evidence that the evangelical Christians (no more than 20 per cent of the population) who make up the core of the ‘moral majority’ eagerly embraced the alliance with big business and the Republican Party as a means to further promote their evangelical and moral agenda. This was certainly the case with the shadowy and secretive organization of Christian conservatives that constituted the Council for National Policy, founded in 1981, ‘to strategize how to turn the country to the right’.
The Democratic Party, on the other hand, was fundamentally riven by the need to placate, if not succour, corporate and financial interests while at the same time making some gestures towards improving the material conditions of life for its popular base. During the Clinton presidency it ended up choosing the former over the latter and therefore fell directly into the neoliberal fold of policy prescription and implementation (as, for example, in the reform of welfare).
But, as in the case of Felix Rohatyn, it is doubtful if this was Clinton’s agenda from the very beginning. Faced with the need to overcome a huge deficit and spark economic growth, his only feasible economic path was deficit reduction to achieve low interest rates.
That meant either substantially higher taxation (which amounted to electoral suicide) or cutbacks in the budget. Going for the latter meant, as Yergin and Stanislaw put it, ‘betraying their traditional constituencies in order to pamper the rich’ or, as Joseph Stiglitz, once chair of Clinton’s Council of Economic Advisors, later confessed, ‘we did manage to tighten the belts of the poor as we loosened those on the rich’. Social policy was in effect put in the care of the Wall Street bondholders (much as had happened in New York City earlier), with predictable consequences.
The political structure that emerged was quite simple. The Republican Party could mobilize massive financial resources and mobilize its popular base to vote against its material interests on cultural/religious grounds while the Democratic Party could not afford to attend to the material needs (for example for a national healthcare system) of its traditional popular base for fear of offending capitalist class interests. Given the asymmetry, the political hegemony of the Republican Party became more sure.