Taking Aim at Popular Sovereignty

Jason Hirthler

Shortly after the Cold War ended, the Pentagon advanced a strategic paradigm that judged American military might by its capacity to conduct two “major theater” wars simultaneously. Though later modified by the Bush and Obama administrations, the concept illustrated the scope of American ambitions in the unipolar world it perceived behind the collapsing scenery of the Soviet Union. Today the forces of neoliberal capital, represented variously by the Bilderberg Group, the Group of Thirty, the G7, and which are the motive force of U.S. imperial strategy, are prosecuting two simultaneous wars against the withering forces of popular rule—but by other means than military.

Enervated by forty years of persistent assault by neoliberal ideologues and their political flacks, the Western world’s progressive community and its legacy of embedded rights seems at times a spent force, unable to galvanize a soporific community of first-world consumers enthralled by the promise of creature comforts but little else. Even as its mostly deeply held beliefs in populism are emptied of their power. Western populace is largely unmoved as the twin forces of finance and trade perform a blitzkrieg on democratic sovereignty. Through a fog of legal casuistry and token reform, it is those that suffer racism and real economic exclusion that raise their voices, and their fists, in reply. But will their lone ire be enough? In more comfortable liberal circles, only the faintest signs of protest flicker absently across the expanse of exurban cul-de-sacs. These communities are happy to be co-opted by a compromised democratic left, content to hide behind the rhetoric of reform and the dispiriting “realities” of modern politics.

The first frontal assault on popular rule is in banking and finance, the second along the hazy frontier of free trade. On both fronts the advance guard of capital—represented by corporate trade negotiators and European Union executives—is rolling virtually unopposed through the economic and legal landscape of democratic governance, erecting new models designed to undermine national sovereignties at every turn, and finally shackle nation-states within a prison of corporate fascism. Two instances below nicely illustrate the stakes being contested and the methods involved. Though the venues are underwhelming—bureaucratic Brussels, sleepy Frankfurt, dull conference centers in New Zealand and Canada—the outcomes will be real and lasting.

The Finance Sector

The European Central Bank is not what one would describe as an ethically sound organization. As financial crises rolled through Europe, the ECB took one pitiless stance after another regarding economies of its members. Its destruction of Ireland is a case study in cruelty. Then, when more recently faced with a teetering Greek republic and a freshly elected anti-austerity government, the ECB barely hesitated. It reduced liquidity and then reduced the cap on Greece’s ability to issue, sell, and buy its treasury bonds, reducing the Greeks ability to finance their government. In so doing, ECB President Mario Draghi was essentially suffocating the Greek economy in order to force it to accept its detested neoliberal prescriptions. And you know what these prescriptions are: cutting state spending by slashing social welfare and constricting budgets in a straightjacket of inflexible deficit caps; liberalization of the labor market—that clever euphemism used to disguise the deregulation of labor for the benefit of capital; the privatization of state assets, ostensibly to generate cash to fund the budget, but in reality designed to both ensure regular interest payments to the ECB and to slowly cripple the state itself, removing its power to resist the decrees of a federalized Europe, run top-down by unelected bank commissions. This latter kind of privatization is effectively a form of “accumulation by dispossession,” as social geographer David Harvey puts it. And this is why earlier this year Greek Prime Minister Alex Tsipras and Finance Minister Yanis Varoufakis were bullied into agreeing to continue, almost without revision, the neoliberal framework accepted by previous governments, despite their Syriza party’s initial promise to reject austerity. That agreement was interim, and the troika and the Greeks are working on new lending regime due to be concluded this summer.

Even such a minor concession as slowing the implementation of austerity—which Varoufakis had hoped to achieve—was too much for the ECB to stomach. The troika, or “institutions” that include the ECB, the International Monetary Fund (IMF) and the European Commission, is unflinching in its ideological commitment to neoliberalism. Everyone must toe the line. Everybody has to march in step. No concessions will be made in the inexorable advance of capital toward the complete control of the EU. Mario Draghi, of course, answers to the major banking concerns of the world, his fellow members of the Group of Thirty, a private cabal of central bankers.

The ECB is now the Single Supervisory Mechanism (SSM) of the European Union, an idea ratified in 2013. This makes it the final supervisory authority of major member banks in the Eurozone, evidently a significant step toward “banking union,” which would further remove member states’ sovereign control of their economy—ever the covert dream of EU visionaries. In order to receive the ECB’s sanction to print euros, Greece must swallow the poison pill of austerity. This power makes it the de facto policy maker of Europe. Once the hope of Greek’s desultory youth and bitter public workers, Syriza has proven itself to be a false radical, having surrendered to ECB pressure. The radical elements in Syriza may mutiny, but the party’s capitulation isn’t much of a surprise. As the Oceania Saker wrote, “Empires do not surrender their colonies through reasonable arguments or by the bankruptcy of their regressive ‘reforms.’”

The Trade Sector

Add this loss of domestic power the evolving apparatus of global trade being implemented through the Trans-Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Partnership (TTIP), and previously the WTO and NAFTA, among other treaties. This free trade superstructure is establishing a supranational legal framework designed to privilege corporate profiteering over domestic legislation in the public interest. Recent leaked elements of both treaties shed light on the anti-democratic nature of each. A proposal from the TTIP negotiations recommends that all draft domestic legislation be subjected to a vast, byzantine screening process conducted by a ‘regulatory cooperation body’ evidently staffed by TTIP insiders. The power of the body to reject legislation isn’t clear, but certainly it would wield tremendous influence on proposed law, as it would represent the consolidated interests of multinational beneficiaries of the TTIP. Perhaps the more immediate goal of the screening apparatus would be to simply deter and delay the implementation of any legislation deemed harmful to corporate interests—regardless of whether that legislation is in the public or planetary interest. As if the independence of legislators across the developed world isn’t already vitiated by corporate patronage, the TTIP would expand the fetters that would prevent an independent-minded member of parliament from acting on the citizen’s behalf, making it ever easier to rationalize selling his constituents down the river, in the great tradition of Barack Obama.

Recent WikiLeaks revelations from the TPP negotiation are even more daunting in the shameless manner by which they flout democratic institutions. The TPP has already built in extensive powers for the Investor State Dispute Settlement (ISDS) model. The increasingly infamous ISDS allows corporations to sue governments if a company decides that domestic legislation is an unreasonable fetter on its profit forecasts. Suits are resolved in unelected private tribunals staffed by both parties to the suit and by another, supposedly neutral arbiter.

The ISDS model has already borne fruit for corporate power. Public Citizen conducted a thorough analysis of the leaked investment chapter and had this to say about ISDS:

Under U.S. “free trade” agreements (FTAs) alone, foreign firms have already pocketed more than $440 million in taxpayer money via investor-state cases. This includes cases against natural resource policies, environmental protections, health and safety measures and more. ISDS tribunals have ordered more than $3.6 billion in compensation to investors under all U.S. FTAs and Bilateral Investment Treaties (BITs). More than $38 billion remains in pending ISDS claims under these pacts, nearly all of which relate to environmental, energy, financial regulation, public health, land use and transportation policies.

Like the TTIP, the TPP model elevates corporate interests above public interests. And like these trade partnerships, the federal model of the EU uses monetary policy to restrict the democratic impulses of its member populations. Together, the architecture of these commercial and financial formations promise to pinion global populations within a nominally representative but wholly unaccountable regime of multinational corporate cartels. Though Mussolini said corporatism was the merger of the state with corporate power, the coming reality represents the definitive triumph of the corporation over the state. It absorbs the state whole. Decisively beaten on two fronts, the state will likely continue to exist, but not as a democratic institution. In the new dystopia, its role would be to serve as an instrument of repression. An instrument through which corporate power can beat back negative popular reactions to its strip-mining of nation-states, their resources, and the remaining assets of an angry and alienated populace. The only question that remains is how long the majority will tolerate the intolerable.

A Coda on Change

Despite the air of inevitability around the trade and finance initiatives, there are flashes of resistance. In the past week, the Greek Supreme Court has declared pension cuts unconstitutional, a remarkable step that directly defies the prescriptions of the ECB, setting up a showdown between federal and provincial Europe. Syriza also relaunched the state television station shut down thanks to austerity. Spain’s anti-austerity Podemos continues to threaten establishment parties in advance of December elections. Across the Atlantic, in a seemingly unrelated scenario, a popular uprising has grown around the killing of a black Baltimore resident in police custody. Coming after much-publicized deaths at the hands of police in Ferguson and New York, a consistent pattern of unrest is surfacing across American society. The sour public mood is also evident in repeated nationwide strikes by service workers for higher wages, and numerous urban movements insisting that local municipalities pay $15 an hour. And not least in the rising resistance to the diktats of the unelected and self-appointed arbiters of world trade. On the face of it, these protests seem to address separate issues. But they don’t. The EU protests in Greece and Spain in particular, and the U.S. protests in Baltimore, Seattle, Chicago, and elsewhere, have a common cause: the unrelenting assault of neoliberalism—on wages, on democracy, on labor, on social welfare, on minorities, and on federal government itself. Whether a reaction to intolerable economic policies, transparent efforts to remove economic decision-making from the public realm, or cries of rage against the repressive arm of the state, a single animus sparks each flare of discontent. Whether they will coalesce into a bonfire of neoliberal vanities remains to be seen.