The Contemporary Transformation of the State Model in Western Capitalist Countries: A Return to Oligarchy?
17.10.1 The “Thirty Glorious Years”, or the Contemporary Way of Addressing the Social Question
The economic recovery following World War II—which in France came to be called the “Thirty Glorious Years” (1945-1975), or the “invisible revolution” (Fourastie 1987, 79)—generated in the west a feeling of general affluence which ended up dampening the political struggle for worker protection and economic equality (Eley 2002, 405-428).
As the distinction between the proletariat and the bourgeoisie blurred and faded in the post-War era, particularly through the 1960s, trade union and workers rights initiatives waned, in large measure because working class individuals, rather than striving to seize power, concentrated their efforts on bettering their economic situations and forming part of the expanding and increasingly accessible middle class (Stark 1990, 310-329).The dwindling cogency of Marxist precepts was described by post-Marxist thinkers such as Cornelius Castoriadis (1922-1997)[1090] and Herbert Marcuse (1898-1979) who tried to adapt the leftist approach to advanced industrial societies (Marcuse 2007).[1091] Critiques of capitalist society’s values and examinations of its paradoxes and contradictions, offered up by thinkers such as Thorstein Veblen (1857-1929), who popularized the concepts of the “leisure class” (Diggins 1999) and “conspicuous consumption”, proved more pertinent than the old orthodox Marxist doctrine.[1092]
The assumption that unlimited economic growth would allow all to enjoy higher standards of living, that a “rising tide would lift all boats”, was called into question by the first oil crisis, in 1974. To prevent an economic standstill western societies increasingly resorted to incurring public and private debt, which paved the way for the “financial economy”, which began to play an increasingly pivotal role superseding truly productive sectors and activities.
We should not forget that it was excessive debt that gave rise to the financial crisis, which swept the globe in 2007,leading to the historic bankruptcy of Lehman Brothers in 2008, and sinking the world in an unprecedented global economic crisis.
17.10.2 The Neoliberal Way and John Rawls' Theory
of Justice
From the point of view of legal and constitutional history, the welfare state model was openly criticized and challenged during the 1980s by the conservative administrations of President Ronald Reagan (1981-1989) in the U.S., and Prime Minister Margaret Thatcher in the United Kingdom (1979-1990). Both leaders implemented policies of “deregulation”, favoring private initiative and enterprise in the economic sphere while restoring the principle that the role of the state is not to assure the welfare of all, but rather to promote prosperity by allowing free markets to generate maximum levels of wealth.[1093] These leaders’ economic advisors[1094] and allies were also quick to point out that the private sector offers far more effective and efficient management than do public entities.[1095]
This resurgence of the liberal model of the state also had consequences in the field of legal theory, particularly in the work of the American legal philosopher John Rawls (1921-2002), who besides redefining the idea of public reason (Rawls 1997, 765-807) and political liberalism (Rawls 2011), in his most acclaimed works A Theory of Justice (1971),[1096] and Justice as Fairness: A Restatement (2001)[1097] examined and presented justice as a search for what was fair rather than as a struggle between clashing interests (Paivansalo 2012), thereby breaking with the abovementioned influential theories advanced by Rudolf von Ihering (Gaus 2003, 177-204).[1098]
17.10.3 Growing Inequality and Its Constitutional Consequences
Though the deregulatory policies adopted in the United Kingdom and United States in the 1980s yielded considerable economic prosperity in the short term, in the long term they fostered not only to structural imbalances in the western economies, but also pronounced social inequality as the richest grew richer, the position of the middle class stagnated, and the increase in the numbers of the poor became alarming (Atkinson et al.
2010, 664-692). Between 1980 and 2000, the richest of the rich, the top 1 %,[1099] went from controlling 8 % to 16 % of GDP, while the moderately rich, representing 10 % of the world population,[1100] did only from 25 % to 27 % (Kempf 2013, 33-34). Nevertheless, despite a considerable increase in inequality in the European Union, this economy remains one of the most egalitarian in the world.[1101]This trend is not unique to the most advanced western countries, as inequality has grown in the developing world as well, where China and India are prime examples (Piketty and Qian 2010, 44-47). In 2012, China already boasted a growing number of millionaires, and a huge gap with its rural population that generally lives in poverty (Sicular et al. 2010, 85-104). India’s 100 richest people, meanwhile, have gone from controlling 0.4 % of the nation’s wealth in 1998 to 25 % in 2009.[1102] This trend is even more significant when one considers that in 2010 the “developing countries” accounted for 50 % of the world’s total wealth, according to OECD sources, which raises the question of whether the days of western economic supremacy are numbered.[1103] In any case, what is indisputable, according to critics of the current system, is that decreased wealth should be accepted and expected by western political leaders as they look to the future, as ever-greater prosperity based on perpetual growth is simply not sustainable.[1104]
The system, however, is sustained, as observed by Susan George, because the masses are afraid of losing their jobs, and anxious of their own futures, and anxious about their children. In fact, this is the first generation that believes that its offspring will have it worse than they did. In this context the middle classes of the developed world, however, must recognize and bear in mind that they continue to be extremely fortunate, which generates a widespread feeling of TINA (There Is No Alternative).[1105]
The feeling that nothing can be changed explains the growing political apathy among the citizens of democratic nations, to the point that, we are witnessing the consolidation of a trend towards chronic abstention (Subileau and Toinet 1993).[1106] The shifts in the percentages of those not voting in European elections are illustrative: 38 % in 1979, 41 % in 1984, 41.5 % in 1989,43.3 % in 1994, 50.5 % in 1999,
54.6 % in 2004, and 56.8 % in 2009—a troubling trend that is also being observed in the United States, in both legislative and presidential elections (Barbour and Wright 2013, 391-392).
17.10.4 Towards a New Oligarchic Model of the State?
The legal and constitutional consequence of these important economic and social transformations is that, from the point of view of constitutional history, the democratic principle runs the risk of being progressively supplanted by oligarchy, as the massive fortunes forged during the 1980s have allied with the political class (Le Goff 2003, 136-137). This situation is far from the “Property-Owning Democracy” advanced by John Rawls and James Meade as the necessary alternative to liberal democratic socialism,[1107] and which some call “Post Democracy” (Crouch 2004, 53-69). This trend is by no means one exclusive to democratic regimes, as even in autocratic, emergent powers, such as the People’s Republic of China power is increasingly held by a political/financial oligarchy which, after concentrating in its hands the lion’s share of the country’s wealth, has proceeded to amass political power in an increasingly clear and uncontested fashion. As scholar Jean-Luc Domenach has explained, the bureaucratic class that has governed the country for over 50 years has partially morphed into a cadre of businessmen constituting a plutocratic oligarchy (Domenach 1984, 23-39).[1108]
It should not be overlooked that the return to oligarchic government was already advanced in 1942 by Joseph Schumpeter in his book Capitalism, Socialism and Democracy, in which he endorsed returning to government by a ruling class rather than fully embracing egalitarian values and democratic government understood as maximum attentiveness to the dictates of the masses.[1109] Democracies’ regression to oligarchy was already noted by Robert Michels in 1911 (Michels 2008), a constitutional situation fast evolving from a threat into a patent reality.[1110]
The situation seems particularly dangerous when these oligarchies convene at international forums to set global policies, with decisions made by groups of a private nature that seek to conceal the magnitude of their power.
Cases in point include the Trilateral Commission created in 1973, the Bilderberg Group, and the Davos Forum, which Susan George calls the “Davos class” (George 2010, 6)— influential pressure groups which play decisive roles in determining government policy around the world. Today it seems that the state has granted itself license tointervene in the lives of individuals, with the means justified by the end of optimal resource management, as if it were a kind of businessman.[1111] This premise is dangerous, as this kind of intervention could ultimately take precedence over representativeness and, taken to its extreme, over democracy itself[1112] and the Rule of Law.[1113]
For some critics the state has already become a kind of giant company, with everything determined by what its “managers” decide. According to this view public leaders have become all but businesspeople, with the important caveat that the constitutional pact prevails, and citizens enjoy a constitutional framework through which they may recover their freedom when circumstances make clear— for example, by recurring economic crises—that running the state based on a corporate model has its limitations (Sandel 2012, 6-16). The solution for many lies in a new way of governing, not based on power but on negotiation, with governance replacing government.
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