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Oligarchies controlling polical systems a problem well beyond Russia


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Russian. Oligarchs. Long before the election of Donald Trump and the resultant Russia-gate brouhaha and last week’s fiasco in Helsinki, the rape-and-pillage approach to wealth generation was the defining feature of post-Soviet Russia.

A handful of people became billionaires by essentially stealing formerly public assets – taken from the pages of the privatization handbook espoused by some in the West – and currying favour with the Kremlin, particularly one wily ex-KGB agent. That’s why sanctions for the likes of the occupation of Crimea, election tampering and poisoning of critics on foreign soil are often applied to the oligarchs seen as close to Putin.  There are seven prime oligarchs, with a worth of about $30 billion, who have business ties to state-controlled sectors, notably oil and gas, natural resources and banking.

The group wields enormous power, political and financial, that extends beyond the borders of Russia … and well beyond  vanity projects/money laundering of buying up sports teams and prime real estate. That extends to meddling in the U.S. election – and in other countries – despite what the U.S. president has to say about the matter, when not reading from a script.

In that way, the Kremlin and Russian oligarchs are no different than the U.S., though the latter has a much longer history and a much larger net in often illegally interfering in the elections and affairs of other countries. History is full of American election tampering, including in Russia itself, most notably in financing the goings-on of the Yeltsin years. When the tampering hasn’t provided the required outcome, the U.S. has not been above assassination and coups, as can be seen in cases from Chile to Guatemala, Cuba to Nicaragua, the Philippines to Vietnam.

Moreover, the U.S. is much more oligarchic, though much less visibly so – it doesn’t hurt to own much of the media that refrains from using “American oligarchs” even while freely doing so for the Russian counterparts.

That the U.S. is dominated by a rich, powerful elite comes as no surprise to anyone paying attention. The reality of that was quantified in a 2014 study by Princeton University Prof. Martin Gilens and Northwestern University Prof. Benjamin Page, who set out by the numbers how government dances to the tune of a small minority of wealthy people and corporations.

“Multivariate analysis indicates that economic elites and organised groups representing business interests have substantial independent impacts on US government policy, while average citizens and mass-based interest groups have little or no independent influence,” they write.

“When a majority of citizens disagrees with economic elites and/or with organised interests, they generally lose. Moreover, because of the strong status quo bias built into the US political system, even when fairly large majorities of Americans favour policy change, they generally do not get it.”

Democracy in the U.S. really started to die in earnest with a spate of deregulation and, particularly, with court decisions that made corporations “persons” and then later conflated money with speech, opening the floodgates for corporate dollars to buy politicians outright, regardless of political stripe. Led by Trump, the Republicans provide little in the way of credibility, especially on the economic front – the Tea Party contingent continues the fantasyland created by Ronald Reagan and embraced ever since. The Democrats offer a smidge more sanity, but both parties have long been bought by a handful of oligarchs and corporate interests.

It’s this very corporatism that has eroded the middle class, subverted democracy, fostered inequality, stolen billions of dollars and led to an unproductive economy where money and power is increasingly held by a small minority.

“Americans do enjoy many features central to democratic governance, such as regular elections, freedom of speech and association and a widespread (if still contested) franchise. But we believe that if policymaking is dominated by powerful business organisations and a small number of affluent Americans, then America’s claims to being a democratic society are seriously threatened,” note Gilens and Page.

The burgeoning middle class, equitable society and philosophy of the common good that developed in the postwar years were a testament to the values of those who came through war, financial excess, Depression and another great war: they were eager to do away with the scourges of the past and to create a better society for themselves and, more pressingly for their children. The next three decades saw that happen. The last three have seen that steadily eroded by the rise of corporatism, including its wholesale purchase of the political system, particularly in the U.S., an undemocratic trend that is being reflected  here as well.

That richest 10 per cent of Canadian families are getting richer. They enjoyed a 30-per-cent earnings increase compared to a generation ago, the only group to experience such gains. This is creating a new phenomenon in income distribution in Canada: the rich are breaking away from the rest of society, in a way not seen since such information began to be collected four decades ago.

Essentially, we’re spending more time at work, but 80 per cent of us are getting a smaller share of Canada’s economy, in good times and in bad. Only the richest 20 per cent are experiencing gains, and most of those gains are concentrated in the top 10 per cent. For many of the rest of us, personal debt grows as we try to maintain our standard of living.

The corporatist situation isn’t as pronounced here, nor are the politics as divisive, but we’re on the same path. We need both the economic and democratic reform critics of the status quo advocate.

Those who argue that regulation only hinders capitalism – often the same people who wrongly equate capitalism with democracy – miss the point of a so-called free market. The idea of a free-market economy is to let the market decide what will be made and in what quantity, rather than the central planning of the communist system, for instance. It doesn’t, however, mean free from regulation. How many people would argue that business should be “free” to use slaves or child labour? That was once the case in the West, but has been regulated out of the mix.

Once we’ve established that the market is an artificial construct that we’ve devised, we’re free to shape it in such a way that it provides only benefits to society, not harms. The deregulation that fuelled the corporatism of the last few decades – think of the rise of globalization, monopolies and oligarchies and the resultant decline in our quality of life – followed a postwar boom that was shaped by a market system that was devised with the broad public in mind. It wasn’t perfect by any means, but far more equitable than is the case today. Deregulation killed that. New regulations controlling the excesses of the financial sector are needed to put us back on track.

The same goes for removing corporate influence in the political system, which extends much deeper than the cyber-meddling of Russia-gate. That’s the real story that needs telling, even if there are many partisan ears unwilling to hear the truth, let alone acknowledge it.

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