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By Edward S. Herman 

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We are in the midst of a major counterrevolution in which the governing classes of the West, taking advantage of the collapse of the Soviet Union, corporate globalization, increased media concentration and commercialization, the sharp attrition of labor organization and political influence, and hence the greater political power of the corporate elite, have been dismantling the welfare state and non-corporate rights and entitlements and moving the world toward a laissez-faire and dog-eat-dog—or rather tiger-eat-rabbit—world. With what is now a global “reserve army” of fragmented and atomized labor and with no alternative system currently threatening western elites and impelling them toward generous treatment of their non-elite majorities, these elites have rushed toward putting in place a version of the Marxian model of pure capitalism that had been thwarted by the rise of national labor movements, the limited mobility of capital, and the now defunct Soviet and Maoist threats. 

The Politics of Reaction 

The ending of the alternative model threats, the growing mobility of capital, and capital’s success in making the global institutional framework more welcoming to capital have made possible more aggressive class warfare and the de facto slow-motion counterrevolution now underway. Key features of the counterrevolution have been: (1) the gradual and still incomplete, but ongoing removal of the welfare state protections of the underlying population, starting with the weakest and most vulnerable (welfare mothers) and then moving toward those of the middle class; (2) deregulation of business and privatization of formerly public assets; (3) termination of protection of the rights to form and maintain labor unions and/or policies actively weakening labor organizations; (4) the absence of any constraint on—and even active encouragement of—outsourcing and foreign investment; and (5) the entering into international agreements that protect corporate rights at the expense of national sovereignty and democratic control. The counterrevolution thus entails a reduction in the role of government in the economy, with the main and massive exception of the military establishment, which is a joint venture of government and private business that serves larger functions: subsidizing business technology, stimulating economic activity (“military Keynesianism”), and assuring “law and order” at home and the advancement of the counterrevolution and empire abroad. 

The word commonly used to describe supporters of the counterrevolution is “conservative.” But this is a gross misnomer, as these officials, politicians, corporate executives and owners, activists, journalists, and intellectuals are clearly not trying to “conserve” anything, but instead are in the business of dismantling existing institutions and relationships and replacing them with others, in accord with specific interests and ideologies. The proper word is “reactionary,” not conservative. This even applies to purported “liberals,” like Bill Clinton and, say, Larry Summers. Clinton took major steps in dismantlement during his terms of office, supporting the Personal Responsibility Act (bearing on item 1 above), financial deregulation (2), and NAFTA and the WTO (4 and 5). He did little or nothing to slow up the weakening of labor organization (3). Summers was a major player in the passage of NAFTA and in the important financial deregulatory actions in the Clinton era (see Jeff Faux’s The Global Class War).

Contrary to right-wing ideology the managers and supporters of the counterrevolution are not in favor of a small and inactive government (as shown in Dean Baker’s The Conservative Nanny State). The counterrevolutionaries want to shrink the government only in its civil functions that serve ordinary citizens. They favor a very large military establishment and police force although “conservatives” implicitly define “government,” which they have made into an invidious word, as exclusive of these favored segments of government. They also favor a government that is very active in pursuing the “national interest” (i.e., corporate interest) at home and abroad and that sits heavily on the underlying population at home to keep them quiet and to manage their personal behavior. This increased internal activity and associated growth of “security” (i.e., pacification) forces moves in parallel with the progress of the counterrevolution, as the damaged general population eventually reacts and must be controlled to permit the counterrevolutionary process to advance. In Grover Norquist’s oftcited desire to shrink government to a size where it can be “drowned in a bathtub,” he was surely not speaking of the military and police—they will be needed to pacify the victims of his counterrevolution at home and abroad. The federal government’s size relative to the GDP did not fall in the Reagan years and has climbed during the Bush-2 era, with the growth in the “defense” (i.e., offense) budget offsetting cuts elsewhere in both cases. The counterrevolutionaries are for both big and repressive government—they are “statist reactionaries.” 

As stressed in Mike Davis’s Planet of Slums, a very important feature of the neoliberal counterrevolution has been the rapid growth and comprehensive neglect of a huge mass of marginalized people who have been driven off the land or out of handicraft and industrial employment by subsidized imports, technological change, and shriveled help to small locals under IMF and World Bank Structural Adjustment Programs. Davis cites a 2002 CIA estimate that possibly a billion workers, representing one-third of the world’s labor force, are unemployed or underemployed and he describes in painful detail the growing slums of the world where this surplus and uncared for population suffers increasingly grim conditions and still grows at the rate of 25 million a year. For the counter-revo lutionaries these people are “unpeople”—no nontokenistic programs are designed to deal with their needs and they present mainly a problem of aesthetics (getting them out of sight) and a potential security threat. This reinforces the governing class’s support of a powerful security apparatus. 

Projecting Power 

The counterrevolution’s forward policy abroad has the merit, to its proponents, of providing a moral environment in which an anti-populist agenda can be pushed at home as well as overseas. Fear of an external demon is stirred up, patriotism is aroused, and the media and populace are led to focus on the triumphs and tragedies of the armed forces wreaking havoc in distant, but “threatening” (i.e., target) countries. Under this protective cover opponents of the counterrevolution can be attacked as subversive and traitorous, and the super-patriotic (but almost universally chicken-hawk) counter-revolutionaries can consolidate their political power and quietly carry out their internal economic program. Of course, if the external efforts bog down and the costs bulk large enough, the counterrevolution may run into problems and even crises, as has been the case with the Iraq invasion-occupation. How this will affect the counterrevolutionary process remains to be seen. 

An important feature of “projecting power” (i.e., imperialism) has always been the skewed distribution of costs and benefits. The costs have always been borne by the general citizenry (including the dead and injured military personnel and their families), while the benefits accrue to military contractors and privileged elite sectors who can plunder the victim countries during and after the invasion-occupation (if successful). (For evidence as regards European colonialism, see Grover Clark’s The Balance Sheets of Imperialism). The benefits can be exceptionally large, because under the conditions of war standards are more lax than usual in the confusion and need for expedited service and under the cover of patriotic ardor, so that markups and literal looting can be higher and more brazen than under normal peacetime conditions. The follow-up plundering can also be immense, with contracts written with the newly installed puppet governments that treat the invading carpetbaggers with great generosity. This means that while the costs to the invader’s community may be very large, so may be the benefits to important invader elites who therefore have incentives to encourage imperial ventures and who also derive from it surpluses that they can use to support politicians who will engage in “forward” policies, as well as media and intellectuals who will put such policies in a good light. 

But the Iraq war has been a bonanza to military contractors, security firms, and local collaborators, a “capitalist paradise” for transnationals, including oil companies, and with still larger payoffs to come if a proper pacification outcome can yet be arranged in the devastated country. With weapons procurement and Pentagon subsidized research on weapons now running at almost $150 billion a year, Lockheed Martin, General Dynamics, Raytheon, Boeing, Northrop Grumman, Honeywell, the Carlyle Group, Computer Sciences, GE, United Technologies, and many others are raking in big profits and have huge backlogs of orders. In the chaos, and with conflict-of-interest built-in and auditing and financial controls feeble, overcharging is massive and vast quantities of government property have disappeared, essentially without complaint. 

 In January 2005 the Special Inspector General for Iraqi Reconstruction, Stewart W. Bowen, Jr., reported that an estimated $8.8 billion from the U.S.-controlled Development Fund for Iraq (DFI) was missing and unaccounted for. Under the terms of the UN resolution creating the DFI, these funds were “to be used in a transparent manner to meet the humanitarian needs of the Iraqi people…” On June 21, 2005 Representative Henry Waxman, submitting a report on “Rebuilding Iraq: U.S. Mismanagement of Iraqi Funds,” pointed out that U.S. authorities withdrew from the DFI account at the Federal Reserve Bank of New York nearly $12 billion in cash, the largest cash withdrawal in history, including over 107 million $100 bills. In late June 2004, in the last week of its existence, the U.S.-dominated Coalition Provisional Authority ordered more than $4 billion in cash for urgent delivery, including the largest one-day transfer of cash in Fed history ($2.4 billion). No accounting firm, and apparently nobody else, monitored the rapid disbursement of these huge sums, doled out in duffel bags or passed out to favored parties from trucks, with very large sums simply vanishing. U.S. officials have not been able to account for billions of dollars. 

Plutocratic Base 

Clearly, the fact that such policies can take hold, which involve huge net losses to the general population and gains to only a tiny elite, with much of the gains based on fraud and theft, shows that democracy is not working very well in the United States. Behind the procedural forms of democracy is a plutocracy in which a small elite has been able to drag its country into serial aggressions by an abuse of power reminiscent of the operations of a full-fledged totalitarian state. As noted, the cultivation of fear and patriotic ardor by demonization is standard operating procedure. This has worked well, although the increasing numbers that have opposed imperialist ventures even before their commencement has presented a growing problem. Thus far the solution has been to go to war anyway and then depend on war ardor and “supporting our boys” to reconcile the public to the attack. 

This has worked in part because the Democratic Party has failed to present the slightest opposition to imperial ventures even when based on contrived and false claims and involving gross violations of international law. The Democratic Party is more clearly than ever an only slightly watered-down party of business, a financial hostage to business and the pro-Israel lobby, unable and/or unwilling to serve its mass constituency. It speaks for the “governing class,” not the general citizenry, which has no effective political representation. Thus, if the governing class consensus is that we need a gigantic military establishment and a forward policy projecting power globally with the help of that military establishment, this is the view of the mainstream media and the Democrats support this, even if with a somewhat lighter touch. So do many leading liberal intellectuals who want the Democrats to show that they are not weak on “national defense” by more vigorous assertions of patriotism and by using the military establishment—whose immense size they take as a given—to pursue “real” democratization abroad.  

In short, the system works in providing outstanding service to the governing class and its corporate constituency. By the same token, it does badly by the majority of its citizens, who are “managed” into approving or at least tolerating imperial ventures in which that general citizenry pays enormous costs, but with any benefits flowing only to members, associates, and followers of the governing class. This is structured injustice, but the most important component of the injustice resulting from these imperial projects falls on the heads of the citizens of the target states whose deaths and agony may be “worth it” to Madeleine Albright, George W. Bush, Condoleeza Rice, and Tony Blair (et al.), but which involve first class criminality deserving of Nuremberg-like trials. 

Can the Counterrevolution Be Stopped and Reversed? 

The counterrevolution is running into difficulties now, with Iraq unpacified and draining the resources of the aggressor state, making its previously “willing executioners” restive; Katrina and the corruption scandals opened many eyes to the quality of the Bush administration; with the world’s population increasingly hostile to the course of U.S. power projection; and with foci of political resistance emerging in Latin America and elsewhere. As noted, however, resistance at home is badly stymied by the failure of the Democrats to offer an alternative and the inability of the larger society to produce a politically meaningful opposition and program. Furthermore, the power of the counterrevolutionary forces is very great and there is the real possibility that in the face of sufficient trouble and threatened defeat they might embark on even more violent imperial enterprises and take on the role of Samson in the Temple (consistent with “end-times” thought prevalent among many of the supporters and some leaders of the ruling quasi-theocratic Administration). 

We can only hope—and work for—more positive outcomes, taking some consolation from the unpredictability of human affairs, the surprise in the growth of political opposition in Latin America, and the possibility that dissatisfied voters will dislodge and replace the DNC Democrats and at least slow down or perhaps even halt and reverse the counterrevolutionary juggernaut.