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Allan Powell: Are we dominated by a 'Predator State?'

July 19, 2013|By ALLAN POWELL

For a good many years, I have been an admirer of John Kenneth Galbraith. He has earned the reputation of a competent and rational economist. Now, his son James, a professor of economics at the University of Texas, is becoming recognized for his talents as an author. His 2008 book, “The Predator State,” a diagnosis of the inner workings of our economy, will assure his prominence as an astute analyst of economic events.

This book is abundant with insights and critical information to stimulate thought. Some of his ideas are daring and might even be irritating to some with a different perspective. Galbraith has as his task the defense of a very controversial thesis: The United States, while claiming to be a democratic republic, is actually a “corporate republic” with the qualities of a predatory state.

This is, as they say, “a bit much” to swallow in one bite. Galbraith sets the stage for this argument at the tragic events of September 2008, when the huge financial crisis of the “Great Recession” overwhelmed our senses. A whole new vocabulary of financial nomenclature became part of ordinary conversation. “Toxic mortgages,” “subprime securitization,” “complicit rating agencies” and “credit-default swaps” are just a few of these hot-button terms.

Galbraith places the blame for this catastrophe on a “fundamental failure of the state” because “the state has the power and the responsibility to prevent such things” and the state failed to do so.

But the state is the creation of people. Moreover, the state is managed by people and is supposed to incorporate their values and rules. Galbraith then identifies the people, the values and the policies that he argues should bear the burden for such a flawed program. The time was 1981 and the leader was incoming President Ronald Reagan, with the admiring support of his conservative followers.

The core ideas of their economic platform were monetarism, supply-side economics (which included tax cuts and a balanced budget), and free markets and trade. These basic theories were to be the “governing rules” of the “Reaganites,” who were regarded more as “governing myths” by Galbraith. These values were more praised than followed. When they were tried, they were not successful.

One by one, Galbraith dismisses this list of proposals put forward by Reagan and his successors. Monetarism (the emphasis on money management) is rejected, and Milton Friedman is quoted as admitting that monetarism is not workable. Supply-side tax cuts for the rich are rejected because there is no detectable stimulant to savings. Free trade is phony because very little trade is free of regulation.

Since “free trade” is the most popular myth of conservatives, it deserves special attention. One has but to look at the number of regulations in towns, cities, counties, states and nations to realize that very little of our activities are free of some form of restraint or regulation. Walk out the front door and jaywalk, and one could get a ticket. Enter the café and find a food inspector. This could go on ad nauseum.

There is another feature in the use of “free market” that merits attention. It has become a code word that, when closely examined, provides an escape from responsibility. They mean freedom from taxes; freedom from safety rules in dangerous occupations; freedom to stifle collective bargaining by laborers; freedom to pollute water, air and soil. In many of these cases, freedom for one is oppression to another.

This leads Galbraith to the significant theme of his book: the predatory state. The very wealthy — who benefit the most by being free of social restraints — want either to have control over those within the state who are expected to do their bidding or to be actively in the structure of government to determine legislation or policy.

In either case, their interests and values will be well-represented. Thus, they are predators who prey on all aspects of public institutions to maintain the privileges of class. To be sure, such a set of propositions will be regarded by many as a radical protest against conventional thought. On the other hand, the insights presented by Galbraith might well serve as a stimulant to take the time to have a fresh look at the direction in which our country is going.

Allan Powell is a professor emeritus of philosophy at Hagerstown Community College.

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