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Ridiculous Sums of Money: Why the War on Drugs Has Failed

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The war on drugs has failed. It has failed to stop, or even slow, the production, trafficking and consumption of drugs.

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The drug war
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Nairobi, Kenya – CONSUMERS IN FINAL MARKET COUNTRIES HAVE NEVER HAD IT SO GOOD

The war on drugs has failed. It has failed to stop, or even slow, the production, trafficking and consumption of drugs. The specific aim to destroy and inhibit the international drug trade — making drugs scarcer and costlier, and thus unaffordable, has only been partially achieved.

Most experts agree that the drug war has prevented some drug abuse by making forbidden substances less readily accessible. It has made drugs like heroin and cocaine vastly more expensive than similar agricultural-based psychoactive products such as coffee or tea. One study shows that the increase in price per gram as cocaine moves down its distribution chain is up to 100,000% that of coffee. Also, the fact that illegal drugs are not readily available at your local chemist or supermarket has undoubtedly meant fewer users are able to access them.

However, this is only part of the story. In fact, consumers in final market countries have never had it so good. Overall, the price of most illegal drugs has actually plummeted while the drugs have become even more potent.

A study published in the British Medical Journal’s BMJ Open found that in the nearly two decades between 1990 and 2007, the purity of cocaine available in the United States increased by 11% while its price collapsed by 80%; the purity of heroin shot up by 60% while its price fell by a precipitous 81%; marijuana saw more than a tripling in purity accompanied by a similar drop in price to that of heroin and cocaine. The trends were similar across the Atlantic. In 18 European countries, the street price of cocaine halved over the same period. At the same time, in the decade between 2003 and 2013, the value of the global drug trade grew by over 35% from $320 billion to $435 billion, and, according to the UN, the drug business continues to be the third biggest in the world after oil and arms.

The war on drugs amounts to a transfer of the economic, political, social and environmental costs of prohibition from rich consumer countries to poorer producer and transit countries in return for a few dollars in aid

The number of people using drugs appears largely unaffected by the war on drugs. It is true that increased seizure and crop eradication, coupled with alternative development aimed at reducing the incentives for illicit cultivation, have reduced the amount of cocaine on offer.

TRAFFICKERS ARE FINDING NEW MARKETS AROUND THE WORLD

Still, although the 2016 UN World Drugs Report cautiously concluded that ‘the global cocaine market has indeed been shrinking,’ this is attributable both to declining production as well as changing consumption patterns across the globe, not to a reduction in the total numbers of drug users. Essentially, traffickers are finding new markets around the world even as consumption in the US and Europe stagnates, even declines. ‘The drug trade is becoming truly more global,’ Vanda Felbab-Brown, senior fellow at the Brookings Institute, told CNBC in 2013. However, while in mature markets a small proportion of users buy the bulk of the product, their new customers tend to take less cocaine less often. Similarly, the huge fluctuations in the availability of opium – whether due to increased enforcement or not – have not led to dramatic changes in the number of opiate users though for different reasons.

The rub of it is that rather than reduce the number of people on drugs, the drug war has instead funnelled massive amounts of money into the pockets of drug barons and cartels. The global cocaine trade, though utilising a fraction of the land and labor resources required by the coffee industry, rakes in an estimated $85 billion annually from supplying under 20 million consumers with about half a million kilos of the drug. Compare that with the roughly $100 billion the coffee industry shares from providing about 9 billion kilos to the hundreds of millions of coffee lovers. At its peak, the Medellín Cartel in Columbia supplied 80% of the worldwide cocaine market and is estimated to have been generating at least $60 million a day in revenue. In fact, illicit proceeds from the drugs trade now account for half of all income from international organised crime.

In Latin America, drug interdiction efforts are associated with increasing murder rates, not just in the countries where the interdiction is carried out but, when it is successful, in the countries to which the traffickers are displaced

Such ridiculous sums of money make drug dealers immensely powerful and menacing figures. In fact, the war on drugs amounts to a transfer of the economic, political, social and environmental costs of prohibition from rich consumer countries to poorer producer and transit countries in return for a few dollars in aid. These costs include violence, corruption and the loss of legitimacy of state institutions, population displacements and environmental degradation.

In Latin America, drug interdiction efforts are associated with increasing murder rates, not just in the countries where the interdiction is carried out but, when it is successful, in the countries to which the traffickers are displaced. For example, in Colombia, the war against the Medellin cartel in the late 1980s and early 90s saw the homicide rate nearly double between 1985 and 1991. Some 16 years later, a fresh wave of interdiction in Colombia displaced the cartels and associated violence to northern Mexico which, combined with the effect of local policies, saw the homicide rate there triple between 2006 and 2010.

Narco-traffickers are able to corrupt governments and law-enforcement agencies and purchase political influence and even political power. Pablo Escobar, head of the Medellin cartel, created a Robin Hood image for himself in the 80s by building houses and public facilities for the poor. He even got himself elected to the Colombian House of Representatives in 1982. In the Kenyan Parliament, in December 2010, five legislators, Harun Mwau, William Kabogo, Hassan Joho, Simon Mbugua and Mike Mbuvi, were named in connection with the trafficking of narcotics. Two of those have since gone on to become county Governors and one a county Senator. In Guinea-Bissau, which the UN branded Afrca’s first narco-state, the value of the drugs trade is greater than the national income. ‘You walk in, buy the services you need from the government, army and people, and take over,’ was the way one senior official at the US’s Drug Enforcement Agency put it.

Further, drug money distorts the economies it washes through, creating huge inequalities and devastating local living standards. According to a 2009 report by the Financial Transactions and Reports Analysis Centre of Canada, drug traffickers have laundered approximately $100 million per year through the Kenyan financial system. ‘The proceeds of drug trafficking move through the [Kenyan] banking system,’ John Githongo, the veteran anti-corruption campaigner, told Investigative Reporting Project Italy in 2015. ‘In terms of movement of drug money, Kenya now rates higher even than Nigeria due to the rise of narcotics moving in and through the country, but also because of the country’s sophisticated financial system.’ The effects of such flows are not hard to discern.

The drug money is a significant part of the illicit money entering Kenya from fraudulent trade invoicing, crime, corruption and shady business activities, which by 2013 roughly equalled 8% of Kenya’s economy. Much of this money ends up in the country’s real estate, where it has inflated prices and made decent and safe housing unaffordable for the vast majority of the urban population.

The drug money is a significant part of the illicit money entering Kenya from fraudulent trade invoicing, crime, corruption and shady business activities, which by 2013 roughly equalled 8% of Kenya’s economy

Neither has the war on drugs spared populations in the West where it has contributed to mass incarcerations, and the virtual criminalisation of large segments of the citizenry. In the US, the war on drugs mostly targets minorities, particularly African Americans who, though not more likely than others to use or sell drugs, are much more likely to be arrested and incarcerated for drug offenses.

Further it has led to the increased militarization of police forces and new police powers such as asset seizures – meant to turn drug dealers’ ill-gotten gains against them – have in many cases undermined civil liberties. As detailed in The Economist, in the wake of a sharp rise in drug-related violence in the US, in 1990 Congress ‘allowed the Defence Department to transfer military gear and weapons to local police departments if they were deemed suitable for use in counter-drug activities.’

A WAR DOOMED FROM THE START

The war on drugs was perhaps doomed from the start as it was built on dubious philosophical, moralistic and even racist foundations and made assumptions that those bearing the most costs would continue to be happy to do so.

In 1875, it was racist hysteria over accounts of Chinese immigrants luring white women into opium dens that led to California passing the first anti-opium law

International drug control efforts can be traced back to the 1912 Hague Opium Convention that entered into force in 1919 and targeted opium, morphine, cocaine and heroin. Over the next half century, a series of international agreements would expand the scope of the anti-drugs effort to include restrictions on cannabis (1925), synthetic narcotics (1948) and psychotropic substances (1971). Drug trafficking was made an international crime in 1936.

The treaties negotiated prior to 1945, while imposing some restrictions on exports, did not actually criminalise drug use or cultivation or, indeed, the substances themselves. Rather, despite fierce debate, they were predominantly concerned with regulating the licit trade and ensuring the availability of a range of drugs for medical purposes. (Heroin was created by chemists working for the German company Bayer, and marketed alongside aspirin as a remedy for coughs, colds and ‘irritation’ in children. Cocaine, was first isolated in 1859 by German chemist Albert Niemann, made its debut in toothache drops marketed to children and was famously an ingredient in Coca-Cola.)

While the US increasingly pushed the issue of recreational and traditional use of drugs, it was primarily dealt with through attempts to prevent the leakage of licit drugs into illicit channels. In 1925, the two most ‘prohibitionist’ countries at the time, US and China, withdrew from negotiations on the International Opium Convention, because they considered it insufficiently restrictive.

The US, then in the throes of domestic alcohol prohibition, had hoped to entice the rest of the world into quitting, not just drugs, but booze for good. In fact, the aim of the US was to extend its prohibitive domestic laws across the globe. It was the US that had convened the 1909 Shanghai Opium Commission – which laid the groundwork for the 1912 convention, just 15 days after Congress had passed the Act to Prohibit the Importation and Use Of Opium for Other Than Medicinal Purposes, the first in a long line of prohibitive drug legislation. However, it was opposed by France, Great Britain, Portugal and the Netherlands, whose colonies were then turning a handsome profit from legal as well as illicit sales of opiates to Europe and the US.

According to the report America’s Habit: Drug Abuse, Drug Trafficking, & Organized Crime, issued by the President’s Commission on Organised Crime in 1986, most of the opium reaching the US in the 1920s and 30s was coming from France, Asia and the Mideast.

US efforts to interdict the supply of cocaine – which the US had outlawed in 1914 – and to a limited extent, opium, also included trying to entice its southern neighbours to adopt similar policies. However, few were interested. As detailed by Maria Celia Toro in her book, Mexico’s ‘War’ On Drugs: Causes and Consequences, ‘Those early attempts to enlist the co-operation of Latin American governments in suppressing the drug market were for the most part unsuccessful.’ Some were happy to sign agreements but balked at actually implementing anti-drug policies.

A LUCRATIVE, ANCIENT AND LEGAL COCA LEAF MARKET

Further, Peru and Bolivia, then the largest producers of coca leaf and whose participation Washington prized most, ‘had little interest in curtailing a lucrative, ancient and legal coca leaf market.’ Only Mexico accepted. But not because it particularly agreed with the policy. According to Toro, ‘Rather than trying to appease the US or reduce drug consumption at home, Mexico was trying to influence US conduct regarding antidrug law enforcement.’

In 1916, the Mexican Revolution was still raging. The country had just emerged from a year-long civil war and was still battling an insurgent guerrilla group. The last thing it needed was conflict along its border. And border conflict is exactly what the US bans on cocaine and opium (and later alcohol) created. ‘What at the beginning of the century constituted legal exports of minimal value soon became a significant smuggling activity,’ writes Toro. Citing historian F. Arturo Rosales, Curtis Marez in his book Drug Wars: The Political Economy of Narcotics, describes it thus: ‘In the 1910s and 1920s, liquor and drug wars involving competing smugglers and US police … rivalled the border battles fought by political factions during the revolution. These contraband wars left numerous smugglers and border agents dead.’

But by joining the American prohibition bandwagon beginning with a ban on opium imports in 1916, Mexico created the very conditions for the violence and instability it was trying to avoid. Toro writes that smuggling ‘later turned into a black market problem after different Mexican administrations outlawed trade and production of opium and other drugs.’

John Ehrlichman: We knew we couldn’t make it illegal to be either against the war or black, but by getting the public to associate the hippies with marijuana and blacks with heroin, and then criminalising both heavily, we could disrupt those communities

Further, a distinctly racist attitude and fears of economic competition by minority groups informed US approaches to the regulation of drugs. In 1875, it was racist hysteria over accounts of Chinese immigrants luring white women into opium dens that led to California passing the first anti-opium law. Cocaine was similarly criminalised for its association with black communities. The white community’s economic fears of freed slaves gaining a foothold in the economy following the US civil war provided fertile ground for racist rumours of a drug that had the capacity to incite them to violence. With the New York Times running headlines warning ‘Negro Cocaine Fiends are a New Southern Menace,’ New Orleans became the first city to enact laws against cocaine in the early 1900s and the trend quickly spread. The banning of marijuana was a reaction to the influx of low-wage Mexican immigrants in the 1920s, sparked in part by the Mexican revolution. With the Great Depression creating massive unemployment, the ‘evil weed’ was the subject of lurid national campaigns that linked it to violence, crime and other socially deviant behaviours. By 1931, some 29 states had outlawed marijuana.

HOW PROHIBITION INCENTIVISED VIOLENCE AND DRUG SUPPLY

There are a number of things to note here. First, the US has been the primary driving force behind global prohibition efforts and has essentially sought to use international conventions to impose its drug puritanism on the globe and to export the problems drugs caused at home. Second, there was little appetite in the West, at least in Europe, for criminalising drugs when they were the countries that were benefiting from their illegal trafficking. Third, other countries initially resisted US-style prohibition and when Mexico caved in, it was for reasons other than the utility of prohibition in fighting drugs. Fourth, the effect of prohibition on drug prices immediately incentivised both violence and increased drug supply. In fact, the President’s Commission on Organised Crime acknowledged, ‘Heroin trafficking in this country first became big business in the 1920’s.’ And finally, the prohibition of drugs is fuelled at least as much by economic fears and cultural prejudice as by concerns over health effects and the social harm they cause.

All these trends have come to define the international drugs war in the decades after World War II. The US emerged from that conflict as the most powerful country in the world and the global prohibition of drugs was embedded into the DNA of the post-war order it crafted. However, unlike 20 years prior, it could now apply the necessary pressure to impose it on other countries via the United Nations system.

In 1961, the US initiated the United Nations Single Convention on Narcotic Drugs, which sought to consolidate the various international agreements into one regime governing the global drugs trade. But more than that, it included provisions that were not in previous treaties including controls over the cultivation of plants from which narcotics are derived, which placed a heavy burden on producer countries in the developing world where the cultivation and widespread traditional use of opium poppy, coca leaf and cannabis were concentrated at the time. The Single Convention institutionalised prohibition and targets for abolishing traditional and quasi-medical uses of opium, coca and cannabis within 25 years. The Convention was also notable, for it was the first time that penal provisions were included in a widely accepted international drug control treaty. Further it required countries to regulate not just production, manufacture and export, but also possession of drugs.

A decade after the Single Convention was signed, a parallel process started to emerge with the signing of the1971 Convention on Psychotropic Substances. Replicating the trends witnessed during the pre-war treaties, Western countries attempted, according to the President of the International Association of Penal Law, Cherif Bassiouni, ‘to impose strong controls over the cultivation, production and traffic of natural drugs originating in the developing countries, [but] were unwilling to impose the same types of control over their own chemical and pharmaceutical industries.

THE TARGET: ANTI-WAR HIPPIES AND BLACKS

That same year, President Richard Nixon famously declared what came to known as the ‘war on drugs’ in an address to Congress. Drug abuse, he said, was America’s ‘public enemy number one,’ despite the fact that consumption was not any worse than at any other time in history. What Nixon and his henchmen didn’t tell the public was that the ‘war’ was little more than a cynical ploy to fire up their political base using the tried and tested methods of the 1930s, and to curtail domestic dissent. John Ehrlichman, Nixon’s domestic policy chief who served time for his role in the Watergate scandal, made this stunning admission to journalist Dan Baum in 1994: ‘The Nixon campaign in 1968, and the Nixon White House after that, had two enemies: The anti-war left and black people. You understand what I’m saying? We knew we couldn’t make it illegal to be either against the war or black, but by getting the public to associate the hippies with marijuana and blacks with heroin, and then criminalising both heavily, we could disrupt those communities. We could arrest their leaders, raid their homes, break up their meetings, and vilify them night after night on the evening news. Did we know we were lying about the drugs? Of course we did.’

Seeing its political effectiveness, subsequent US presidents prosecuted the fake war, culminating in Ronald Reagan, who launched a period of mass hysteria over crack cocaine in the 1980s. As in the 1930s, the media painted crack users as violent, poor urban and most significantly, black. Crack and powder cocaine are the same drug. Crack is basically powder cocaine mixed with water and baking soda and the person who has the crack actually has less pure cocaine overall. For this reason, it is cheaper and preferred by low-income users. However, Congress, driven by the racist hysteria, concluded that crack was indeed the more dangerous drug and deliberately imposed much harsher penalties. The ‘Negro Cocaine Fiends’ of half a century before had become ‘crack-fiends,’ and mothers of ‘crack-babies.’ In three decades, the country quadrupled its prison population — all with no change in the rates of crime or drug use.

JUST LEGALISE IT, FOR GOD’S SAKE

Still, as discussed earlier, it has been producer and transit nations that have paid the highest price for the war of drugs. But many have begun balking at this and are openly questioning whether prohibition has been worth the cost. In 2009, three former presidents, Ernesto Zedillo of Mexico, César Gaviria of Colombia and Fernando Henrique Cardoso of Brazil declared that prohibition was simply not worth it. ‘Prohibitionist policies based on eradication, interdiction and criminalisation of consumption simply haven’t worked,’ they said. ‘The revision of US-inspired drug policies is urgent in the light of the rising levels of violence and corruption associated with narcotics.’

It is not surprising; Latin America, the region that perhaps more than any other, has suffered the consequences of prohibition. To understand how they feel, consider this thought experiment related by Daniel Mejia and Pascual Restrepo in their essay, Why Is Strict Prohibition Collapsing? ‘Suppose for a moment that all cocaine consumption in the US disappears and goes to Canada. Would the US authorities be willing to confront drug trafficking networks at the cost of seeing the homicide rate in cities such as Seattle go up from its current level of about five homicides per 100,000 individuals to a level close to 150 in order to prevent cocaine shipments from reaching Vancouver? If your answer to this question is ‘perhaps not,’ well… this is exactly what Colombia, Mexico and other Latin American countries have been doing over the past 20 years.’

Across the continent, many are rethinking their approach to drugs and rolling back prohibition. In 2010, Argentina’s Supreme Court ruled it unconstitutional to punish people for personal use of marijuana. Mexico has legalised limited amounts of all drugs for personal use. But it is probably in Europe that the greatest challenges to the prohibition orthodoxy have emerged.

The Dutch famously decriminalised cannabis in the early 70s and it has been available for recreational use in certain ‘coffee shops’ since 1976. Though technically illegal, possession of up to 5 grams for personal use is decriminalised. Italy too has decriminalised possession of less than half a gram of most illegal substances. Switzerland, Germany, and the Netherlands have successfully made heroin legally available to addicts through networks of government-run dispensaries.

However Portugal provides the most extensive, and most successful, example of decriminalisation. In July 2001, the country decriminalised all drugs, including cocaine and heroin. As is the case in several other European jurisdictions, purchase and possession for personal use and drug usage itself are still legally prohibited, but are dealt with as administrative, not criminal violations. Drug trafficking, however, is still a serious criminal offense.

No other country has gone so far, and Portugal is still the only country in the EU with a law explicitly declaring drugs to be ‘decriminalised.’ The results have been jaw-dropping. The expected tsunami of drug tourists never arrived. In a white paper for the libertarian think tank Cato Institute, constitutional lawyer and journalist Glenn Greenwald cites empirical data indicating that ‘decriminalisation has had no adverse effect on drug usage rates in Portugal, which, in numerous categories, are now among the lowest in the EU, particularly when compared with states with stringent criminalisation regimes.’

Dan Baum writes that ‘the lifetime prevalence of adult drug use in Portugal rose slightly, but problem drug use — that is, habitual use of hard drugs — declined after Portugal decriminalised, from 7.6 to 6.8 per 1,000 people. Compare that with nearby Italy, which didn’t decriminalise, where the rates rose from 6.0 to 8.6 per 1,000 people over the same time span. Because addicts can now legally obtain sterile syringes in Portugal, decriminalisation seems to have cut radically the number of addicts infected with HIV, from 907 in 2000 to 267 in 2008, while cases of full-blown Aids among addicts fell from 506 to 108 during the same period.’

Prohibition, and its misbegotten offspring, the war on drugs, have failed to bring about the promised drug-free world and have instead visited misery upon millions of the poorest people on the planet

Prohibition is under attack even in the US itself, though to a much lesser extent. Several states, including the District of Columbia, have allowed a legal trade in marijuana though at the federal level it remains prohibited. ‘We’re confronted now with the fact that the US cannot enforce domestically what it promotes elsewhere,’ a member of the UN’s International Narcotics Control Board, which monitors international compliance with the conference’s directives, told Baum.

GOOD RIDDANCE TO BAD LAWS

It is clear that prohibition, and its misbegotten offspring, the war on drugs, have failed to bring about the promised drug-free world. That they have instead visited misery upon millions of the poorest people on the planet is a fact that is only now starting to dawn on global policy makers. However, there is no consensus on how to move forward and in places like China and various Muslim nations where drug offences still attract draconian sanctions including the death penalty, there is little to suggest a changing mindset.

Still, the growing recognition of the failure has opened up the policy space and given reformers the room to imagine different approaches to dealing with drugs. No country is yet willing to experiment with full legalisation, but a broad spectrum of policy choices now exists under the banners of decriminalisation and de-penalisation (which eliminates jail terms for drug offences). One thing we can say for sure – the days of a simplistic, moralistic, one-size-fits-all solution to the challenge posed by the availability of drugs are very much over. Good riddance!

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Mr. Gathara is a social and political commentator and cartoonist based in Nairobi.

Politics

John Magufuli: The Death of a Denier-in-Chief

Late president John Magafuli never was the anti-corruption saviour international media claimed.

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John Magufuli: The Death of a Denier-in-Chief
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Tanzania, a country that produced Julius Nyerere, is a country tottering on the precipice of a pandemic catastrophe. The philosopher-president ruled for 23 years and put the nation on the international map as a frontline state that stood up to Apartheid South Africa and helped liberate modern Uganda by ridding it of Idi Amin.

With the abrupt death of its populist president John Magufuli on March 17, 2021, ostensibly from a COVID-19 related ailment, Tanzania finds itself at a crossroads, insofar as tackling the devasting disease is concerned. Magufuli who was the commander-in-chief of the armed forces, became the denier-in-chief of COVID-19. The disease has decimated scores of Tanzanians, including top government officials.

Magufuli was hailed as a tough anti-corruption crusader, as he entered state house in 2015. Ordinary Tanzanians initially saw him as their saviour in the fight against institutionalised state corruption. The international media also saw him as a man keen on tackling state corruption, “but Magufuli was all about optics,” said a Tanzanian journalist. “He wasn’t fighting state corruption pers se, what he was doing was to get rid of Jakaya Kikwete’s (immediate former president) networks in the government and replace with his own. So, it was just a matter of time before Tanzanians and the world realised Magufuli was just interested in musical chairs.”

Magufuli was re-elected on October 28, 2020 in one of the most controversial post-Nyerere’s Tanzania elections with a whopping 84 percent. His “true colours” revealed themselves after Benjamin Mkapa’s death in July 2020. After mourning the ex-president, Magufuli turned his attention to the business of crippling the opposition.

Magufuli was a protégé of Mkapa who served as president between 1995–2005. It was Mkapa, who in 2015, prevailed on the ruling Chama Cha Mapinduzi (CCM, ‘Party of the Revolution’) national executive council (NEC) to pick newcomer Magufuli as its flagbearer for what was to be a hotly contested general election in October 2015. Magufuli was then primed to run against Edward Lowassa, a CCM stalwart, who had bolted to Chama Cha Democrasia na Maendeleo (CHADEMA), after not clinching the CCM ticket, in which he was touted as one of the hot favourites.

The “true colours” was the ruthlessness with which Magufuli pursued the opposition in the lead-up to the presidential elections. That massive victory came in the backdrop of President Magufuli’s continuous campaigns since being inaugurated as the fifth president in 2015. “Magufuli never stopped campaigning,” said a Tanzanian journalist: “He rode on the wave of populism – dishing out money and favours to select supporters and well-choreographed individuals wherever he went.”

The 2020 Magufuli campaigns were a mirror-image of his mentor’s similar campaigns in 2000. Just like Mkapa’s mission was to presumably pulverize the nascent opposition, Magufuli’s mission 20 years later was similarly to ensure that the “irritating” opposition is no more and is, literary ran out of town. Mkapa in the October 2000 elections unleashed so much violence on the opposition that many of its supporters sought exile in neighbouring Kenya, after the elections.

Mkapa’s use of unmitigated force by Jeshi la Polisi (Tanzania has a police force, as opposed to a police service) and Field Force Unit (FFU), a paramilitary outfit much like Kenya’s dreaded General Service Unit (GSU) was unprecedented in Tanzanian politics. Just like Magufuli, it seems Mkapa’s “true colours” were revealed only after his mentor’s death the previous year on October 14, 1999. Mkapa was a protégé of the founding father Julius Kambarage Nyerere.

It was Nyerere who held Mkapa’s hand in 1995, after influencing his nomination by CCM, and single-handedly campaigned for him throughout the country. Tanzania held its first multiparty general elections in 1995, pitting CCM against a disparate opposition for the first time since its formation in 1977.

He dished out money and favours to select supporters.

Revisiting this unparalleled violence orchestrated on fellow Tanzanians, Mkapa, the former journalist-turned-diplomat-turned-president in his memoirs: My Life, My Purpose – A Tanzanian President Remembers published in January 2019, regretted the 2000 election ordeal. To some Tanzanian journalists and political analysts, Mkapa and Magufuli are today referred to as the chief advocates and perpetrators of state violence in post-independent Tanzania.

Both the presidential elections of 2000 and 2020 happened under a cloud of America’s own election problems: In 2000, it was the “Florida fiasco.” Florida was then governed by the Republican’s presidential candidate, George Bush’s brother, Jeb Bush. Bush was running against the Democratic Party’s Al Gore. Jeb was allegedly accused of rigging on behalf of his elder brother.

Like the Americans say, the electoral college vote was too close to call: the vote was not only going to determine who was going to be the winner of the states’s 25 votes, but the next president after Bill Clinton. A recount was called by the Democrats and for a brief moment, the democrats believed they had taken it, only for the Republicans to also ask for their own recount. Bush won with a razor thin win vote. The democrats were not persuaded. To cut a long story short, the sunshine state’s case found itself in the supreme court, where the republican-led court declared George Bush the eventual winner.

In 2020, with both the Tanzania and US elections being held days apart, America once again came under the world spotlight after the “Pennsylvania problem”, in which President Donald Trump claimed his votes had been tampered with and paid for a recount. The MAGA Republican Party candidate was defending his seat against “sleepy Joe” a derogatory tag given by Trump to Joe Biden.

The citing of both examples here is to emphasise that America in 2000 and 2020 could not claim a moral compass to the Tanzania government’s excesses in its elections. Covering the 2000 elections, I remember in Dar es Salaam, a CCM top official telling us journalists that America could not lecture Tanzania on matters election – “they should first deal with their own election rigging in Florida, before accusing us of unleashing violence and rigging the islands’ results.”

Nyerere had always been opposed to the twin islands of Pemba and Zanzibar’s divorce with the mainland Tanganyika – a sticking sore thump between the mainland and the islands, since the republic turned to plural politics. But he never advocated state violence, instead, he sued for dialogue and persuasion.

Magufuli was determined to put the opposition in its place this time round: In a parliament of 261 members, the opposition only won seven. “By the time I’m through with Tanzania, there’ll be no opposition in the country,” said the deceased in one of his campaign rallies.

There is not a doubt that he loathed the opposition, so much so that he warned the regional commissioners and election officials, “I don’t pay you so that you can allow opposition to win.” Tume la Uchaguzi (National Election Commission) flatly refused any presidential debates and told the opposition it could debate among itself if it so wished.

In Tanzania, CCM ni tasisi,” a local journalist reiterated to me. Literary it means the ruling party CCM is an institution. Figuratively it means, CCM is Tanzania and Tanzania is CCM. Anybody going against the “wishes of the party” would be crushed. The CCM’s propaganda machinery against the leading opposition figure Tundu Lissu of CHADEMA was geared to pulverize all his efforts of running a successful campaign. “He was being hunted down like a wild animal,” said the journalist.

Magufuli claimed Lissu was a supporter of LGBTQ and that he was a tool of the West being used to campaign for mashoga, homosexuals’ rights. Several African presidents during their re-election campaigns have turned the hot-button issue of LGBTQ, their favourite bogeyman: In the terribly conservative African societies, nothing evokes emotions of antipathy like suggesting gay-ism could be mainstreamed. Yoweri Museveni has done it, John Magufuli did it, just like Robert Mugabe did it before him.

CCM being Tanzania and Tanzania being CCM, not even the bravest of private media would dare report on the opposition or against Magufuli and CCM. “There was total blackout on the opposition by the media. All what Tanzanians could read and listen to, on politics, was on the ‘indefatigable Magu’ and his infrastructural developments,” said my Tanzanian journalist friend. Hence, Tanzania media did not report on politics – it reported on Magufuli, the person.

By the time I’m through with Tanzania, there’ll be no opposition in the country

Being heavy users of social media, Tanzanians turned to VPN – virtual private network. Found as an app in many smart phones, it protects one’s communication from snoopers like government agencies and hackers. What VPN does when activated is to bypass the conventional internet service providers (ISP) when connecting to the internet. In the case of Tanzania’s government shutting down its ISP, tech savvy Tanzanians resorted to VPN to access facebook and especially Twitter, to fend off the states’s eavesdropping.

This is the reason why Magufuli ordered all social media outlets shut, said the journalist. All what the Tanzania Communication Authority needed was a nod from Magufuli. A consumer of foreign news outlets, Tanzanians also resorted to BBC, Deutsche Welle (Sauti ya Ujerumani) and VOA, to stay informed on their country’s politics. “This is how many of them were informed and kept tabs on Lissu’s campaigns,” said the journalist.

Even after being sworn-in for the second term, President Magufuli pursued the browbeaten opposition. Chief opposition figure Lissu had to escape the country a second time. “Run or be run over, these people are not joking,” Lissu was ostensibly warned by his intelligence team. In September 2017, Lissu had survived an assassination attempt in Dodoma, that saw his vehicle sprayed with bullets by “unknown” assailants, as he left parliament for his house for lunch. On November 7, 10 days after the elections were over, he hid at the German embassy, then onwards to Brussels, where he had been recuperating for three years after treatment in Nairobi.

The former MP for Arusha Urban Godbless Lema also skipped the country and sought refuge in Kenya after claiming government people were after him. Lema, with his family was granted asylum in Canada.

Nyerere’s CCM may have operated in the one-party era during the cold war, but many Tanzanians of the post-independent generation remember those days with nostalgia. “The party was more democratic and free, unlike today,” said a former CCM mkereketwa (party diehard).

Magufuli’s populism was laced with autocratic tendencies. He told fellow Tanzanians msinijaribu mimi ni jiwe (don’t try me, I’m as tough as a rock), meaning he prided himself in being tough-headed.

“Magufuli’s CCM in the era of multiparty brooks no dissent, is dictatorial and dangerous, while Nyerere’s CCM preferred a palaver type of democracy where party issues were discussed until it arrived at a consensus,” said a University of Dar es Salaam don.

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South Africa: A New Politics From the Left?

Assuming today’s socioeconomic crisis benefits the Left is folly. That will only happen if we have the political vision to make class the fault line of social polarisation, and for that we need to face the challenge of constructing a new party.

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South Africa: A New Politics From the Left?
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Over the last decade, the Left in a number of Western countries has undergone a historic transition from “protest to politics,” to borrow the words of the late Canadian Marxist Leo Panitch and his frequent co-author Sam Gindin. From Podemos in Spain to Sanders in the United States, a new wave of parties and electoral coalitions have emerged and made rapid gains. Despite setbacks and defeats, Panitch and Gindin’s indispensable analysis of these events in The Socialist Challenge Today, casts them in an unambiguously positive light. None of the examples they study offer formulas for resolving the vexing dilemmas facing the socialist movement in our globalised present.

But in their determination to take state power seriously they constitute an unmistakable step forward, after decades in which the Left’s confinement to episodic instances of mobilisation left the electoral field wide open to the parties of business. Part of this “new new” Left’s success stems from a willingness to shake free of its own past. Building a viable socialism of the 21st century, they argue, requires dispensing with the outmoded parts of the Leninist model, like its wager on insurrection, while retaining that which still holds value, like its internationalist spirit.

These developments hold important lessons for us on the South African Left. Just under a decade ago it seemed that we were on the verge of effecting a similar transition “from protest to politics.” During the first decade and a half of democracy, a socialist opposition had found a locus in the so-called “new” social movements—like the Anti-Privatisation Forum—which grew in reaction to various parts of the ruling African National Congress’ neoliberal agenda.

These waged a number of important defensive struggles and scored a few key victories but fundamentally did nothing to loosen capital’s grip on policymaking. By the end of the 2000s most were a spent force. It became clear to a growing segment of the Left that lasting gains would not be achieved unless social agitation were more effectively linked with efforts to seise governing power. The ability to think these more ambitious terms received a major boost when the National Union of Metalworkers South Africa (NUMSA), the nation’s largest manufacturing union, appeared to redraw the political map of the country by breaking from the ANC, amidst a wave of working class militancy.

Of course for the “official” left which NUMSA represented there had never been any turn away from politics as such. But decades of compromise had bred a form of politics that had become completely unmoored from the guiding thread of class antagonism. NUMSA’s move thus constituted a kind of mirror image transition—from a back-room corporatism to a politics more grounded in the methods and spirit of “protest”. This is what imbued the “NUMSA moment” with such hope—it promised to re-connect the two sides of South Africa’s bifurcated Left, and supply the strategic elements that had been missing from each. By matching the militancy and class-independence of the social movement Left with structural and organisational might of the “official” Left, it seemed possible that a mass socialist movement could be rapidly brought into being.

That was not to be. From today’s vantage it’s impossible to regard the NUMSA moment as anything but an abject failure. The political party which eventually issued from it is the farthest cry from the unifying force that so many had hoped for. While the international left has been able to advance by breaking with its shibboleths, the Socialist Revolutionary Workers Party (SRWP) has fallen back on a slavish appropriation of Bolshevik ideology, almost comical in its extremes.

Despite enormous resources, a large part supplied by a US-based billionaire, the party ran a dismal general election campaign in 2019 where it failed to get even a tenth of NUMSA’s own membership to vote for it (it ultimately only amassed 25 000 votes nationally, below the threshold to obtain one seat in Parliament). It’s since never recovered, joining a host of other failed socialist parties on the margins of political life. Marginality seems in turn to have degraded the internal culture of the party, which now resembles closely the Stalinism of the ANC-aligned South African Communist Party in all its worst aspects.

The floundering of the NUMSA moment is a terrible blow. But the setback inflicted on us will far greater if we fail to draw the correct lessons from it. Perhaps the most worrying outcome is that it precipitates a slide back into movementism, and shuts the window that we’ve had to execute the transition from “protest to politics.” Party politics acquired a bad name during the era of “protest” in South Africa, and many on the Left already feel that the SRWP’s example vindicated their worst suspicions.

But what the SRWP actually reveals to us is are not flaws inherent in the party-form as such, so much as the limits of a certain kind of party, one founded on a hidebound Leninism. If the Left were to abandon party building altogether there would, quite simply, be no socialist future. All visions of radical change that eschew parties and an active takeover of the state suffer from a principal defect in that they misconceive the nature of class formation—the process by which individuals become aware of their class position and begin to articulate their politics through it. This is presented as a quasi-automatic effect of the capitalist class structure.

But history offers no support for such a view. Class is impactful because it frames the options we have over so many major decisions in our lives—but not so narrowly as to make resistance to one’s employer, or the system behind him, inevitable. Indeed, the extreme vulnerability of workers under capitalism means that individualised modes of coping tend to be more commonplace than collective action. That’s why socialist consciousness has been the exception rather than the norm in the global history of capitalism, and exceedingly rare in the absence of a well-organised party. As Panitch argued with the force of a life’s work—parties make classes as much as they are made by them.

Thankfully, an outright repudiation of the party-form is not really where we are at in South Africa. The variant of movementism which took hold here, and which has revived in the aftermath of the NUMSA moment, was not really this more extreme kind, which denies the ultimate need for a party. Rather what it advocates is a downgrading of the role of party building or its deferral to some indefinite future.

What seems to be the common premise for this position is that party building can only succeed when perfectly timed to the right “objective conditions” —conditions which are only likely to form in the wake of a rupture moment defined by intensified street-level mobilisation. Only the transformation of mass consciousness brought about by such an episode of struggle can furnish the base for a party. Moreover, efforts to “impose” a party on the working class before this are liable to be rejected by its most conscious and active layers. Cut off from nourishing energy of grassroots movements, they are likely to grow in authoritarian directions. The task of socialists in the present, therefore, is devote ourselves to strengthening movements, and hope that a party may gestate from within them in some future context.

Related but distinguishable from this, is an ingrained hostility on the South African Left towards electoral politics. This view tends to draw a sharp line between the electoral arena and movements. While movements unlock popular power by sensitising their participants to their potential for collective action, elections offer no such platform for consciousness-raising. Instead, they tend to reproduce the atomisation of liberal democracy, and to fortify the myth that progress is possible within it. Moreover, movements which take the electoral road subject themselves to debilitating pressures. The logic of getting the vote tends to conflict with the logic of grassroot mobilisation, and all too often to overwhelm it.

Movementist positions contain many insights. It is wise, for example, to be attuned to the importance of ruptural breaks—the likelihood that we will ever get to a mass party simply through a molecular accretion of our ranks is slim. But the contention that movement building alone is the best way to prepare for such a rupture fails to take seriously the inherent weaknesses of social movements.

Of the numerous movements which sustained the first era of “protest” in post-Apartheid South Africa virtually none remain (barring one major exception). New ones have of course cropped up, and a tide of less organised community protests has continued unabated across the country. But these show equally little likelihood of autonomously cohering into anything bigger or more resilient.

It’s now very hard to avoid the conclusion that their failures resulted from internal rather than external factors. The model underpinning them rested on localised mobilisation around immediate demands, while actively eschewing efforts to politicise a leadership layer. Some of their more excitable proponents portrayed them as crucibles of anti-capitalism, in which the mere experience of collective decision making offered a form of political education beyond what traditional forms of Left organisation could hope to match.

But in doing so they exhibited the same fallacious thinking about class formation that informs all ventures aimed at “changing the world without taking power.” Much less a break with capitalism, it’s not clear that social movements even succeeded in getting most of their members to question their loyalty to the ANC. That left them prone to demobilisation and disorganisation when circumstances changed, when defeats where incurred or when key individuals drifted off or were co-opted.

One strategic upshot of this critique is that the trade-off between movement and party building posited by movementists is a false one. It’s likely that there is no winning formula for transforming single issue mobilisations into lasting, mass organisations without NGOifying them. But what we can do is to ensure that the small advances made by movements each time they arise are not dissipated. After all—the notion that struggle develops consciousness is not a false, what movementists get wrong is overstating the extent to which it does so organically. Virtually every movement throws up militant leaders, who stand to become tribunes for socialist politics if they can be identified, recruited and supported appropriately. This is work that a party is best suited to undertake.

But facing up to the limits of social movements should lead us to even stronger conclusions than this. It should lead us to question the overwhelming strategic significance that they have been accorded in the politics of the “independent left.” If movements are tough to sustain and to politicise, they may not be the vehicles best suited to bringing about a political rupture or ensuring that it outcome favors the Left.

Of course this was a strategic orientation that was largely foisted on us by circumstance. The stranglehold that the Tripartite Alliance (whose third member is the Congress of South African Trade Unions) exercised on organised labour and mass politics generally left little room for an alternative. But the situation has changed. The factionalisation of the ANC, the split in COSATU and the emergence of its rival, the South African Federation of Trade Unions, have created an opening for a more militant socialism to regain a foothold in organised labour. This ought to be the clear priority of socialists.

For all its infirmities, the union movement still presents a much more promising site for grounding socialist politics in a mass base. Although this may not hold for much longer, unions remain mass membership organisations with considerable resources. Most importantly, and most differently from social movements, they have access to structural power (i.e, the power to withdraw labour and shut down the economy). Here is one insight of Leninism which time has not invalidated– that our project will most likely fail unless that structural power is at its center.

If organised labour is once again to become our strategic focal point, this strengthens the case for not consigning the party to an intangible future. The synergies between party-building and organisation building are arguably stronger in the case of unions than social movements. At a fairly abstract level, one reason for this is that union building (or revitalisation) typically relies on a few individuals being prepared to take bold action out of moral conviction. Marxists have often argued something very different—that shopfloors collectivise as soon as workers wake up to their material interests. But narrow self-interest is unlikely to ever motivate someone to take the first steps towards organising their co-workers, since doing so incurs enormous risks but yields no extra benefit—the essence of the “free-rider” problem.

Thus, it’s not a coincidence that so often in history, socialists of various stripes have been significantly overrepresented among the “militant minority.” The values that draw people to the banner of socialism are often the same as those that move them to action against workplace injustices. It’s also not a coincidence that a militant minority is more likely to take shape when socialist ideas are more prominent in the public realm.

Arresting the decline of South African unions, and returning them to their proud history of worker control and grassroots democracy will require a herculean organising effort. At the simplest level this is why we need an organisational vehicle that at  least broadly resembles a party. Without one we have no real means of translating strategic debates into action—of coordinating our energies towards the tasks most likely to yield long-term gains.

There’s therefore a case for not delaying in building a fighting organisation, that tries to cohere leading militants from workplace and community struggles around a socialist program. But such an organisation should do more. As soon as it has the numbers needed, it should seek to involve itself in elections. In all likelihood it would have to start at the local level, and logic would dictate that it seeks out community and social movement partners in doing so. But as quickly as possible is should seek to graduate to the national stage. South Africa’s unusually proportional representation electoral system (which was in fact designed to provide space for smaller parties), makes this a reasonable short-term goal.

Arresting the decline of South African unions, and returning them to their proud history of worker control and grassroots democracy will require a herculean organising effort. At the simplest level this is why we need an organisational vehicle that at least broadly resembles a party.

The first thing that sceptics of this strategy tend to get wrong is that they overstate, or misunderstand, the legitimacy problem facing formal political institutions. The SRWP seems to think that any worker with lingering attachments to electoral politics is suffering from “false consciousness.” But in our current circumstances, there is nothing the least bit irrational about remaining invested in the electoral arena, even while recognising the severity of its class bias. The simple reason for that, is that there is no existing social force capable of challenging state power while remaining entirely outside its institutions, nor does one show any prospect of coming into being in any foreseeable horison. Worker organisations in SA are locked a desperate defensive struggle—not preparing to set up a parallel state.

It’s not a failure of dialectical imagination that causes people to conflate politics with elections, but an appraisal of our situation that is more accurate than the one provided by the apostles of imminent revolution.

It’s thus not surprising that despite the tremendous alienation produced by decades of neoliberalism, electoral movements in the West have been able to engineer a political realignment that was much deeper than what post-2008 movements were able to achieve on their own. Their location within the domain of mainstream politics provided both visibility but also a kind of credibility—they promised to take over the institutions in front of us, rather than replace them with ones we can’t see and can’t yet imagine. Several of these examples stood the movementist model on its head. Rather than an electoral breakthrough growing out of a period of intensified movement activity, it was the electoral arena itself that has delivered the rupture moment, the energy from which can then be filtered down to social and labour struggles.

In the process they challenged another fallacy of movementism—that the electoral arena is entirely inimical to a politics of struggle. Sanders, Corbyn, and others imbued their campaigns with a spirit of insurgency that succeeded in appealing to many otherwise turned off by politics, particularly among younger generations. Rather than sucking energy from the streets, these examples provided a renewed model of “class struggle elections” —not their own invention but one that had faded from the Left’s repertoire during the era of movementism.

Class struggle elections seek to deliberately leverage electoral campaigns, and political office itself, to bolster movements. They use every platform available to raise awareness of, and encourage solidarity with, labour and social struggles. In doing so they try to inculcate the understanding that radical policies can only be won with an inside-outside strategy, in which legislators are supported and pushed forward by powerful movements. At the same time they use campaigns as tools of organisation building.

They recruit and deploy a mass of activist to spread a socialist message, and simultaneously try to develop those activists by building political education into their activities. Done properly, this can bridge the gaps that supposedly separate movement from electoral organising, infusing the latter with a powerful sense of collectivity. That’s why so many thousands of young Americans (to pick a recent example), were politically activated through their involvement in the Sanders campaign, which became a gateway to organising in their workplaces, campuses and communities.

Note that this is completely different to the SRWP’s narrowly propagandistic approach to elections which didn’t promote social struggles so much as fantasies of revolution, whilst denouncing ‘bourgeois democracy’ as a sham and doing nothing to actually win. After a predictably disastrous outcome, the party chose to compound the embarrassment, and feed into a profoundly dangerous trend by denouncing South Africa’s independent election management body and claiming the result was rigged.

It’s not a failure of dialectical imagination that causes people to conflate politics with elections, but an appraisal of our situation that is more accurate than the one provided by the apostles of imminent revolution.

Contrast its subsequent marginalisation with the early trajectory with the Economic Freedom Fighters (now South Africa’s third-largest party), which leveraged the electoral know-how of its ex-ANCYL cadre and Malema’s media savvy to run an enormously successful first campaign. It then built on the success, steadily expanding its vote share each cycle, while using parliamentary office to bolster its national profile. Sadly it drifted off the orbit of the Left along the way. But the two diverging cases provide an obvious lesson: if elections are to be useful to us, we have to show that we are capable of succeeding in them. If we can’t, how on earth will we convince anyone that we’re capable of transforming society from its roots up?

None of this is to suggest that the concerns movementists raise about electoral politics are meritless. Its unquestionably true that electoral competition imposes its own logic, which can be ruinous if it totally subsumes the party’s strategic purview. We can trace the decline of many a worker’s party, at least proximately, to misguided efforts to capture middle-class votes by abandoning a politics of class antagonism. But all socialist strategising in our dismal conjuncture is the consideration of perilous alternatives. Far better for us to confront the dangers of succumbing to a narrow electoralism than the near certitude of permanent marginalisation should we choose to abstain from mainstream politics altogether.

The NUMSA moment may have come and gone. But the many elements of the broader conjuncture which produced it, and which seemed to augur a new direction for socialist politics, persist. The Alliance coalition is in the doldrums. Expecting its inevitable demise is of course a pastime of which we “independent leftists” should now be wary. But the material facts this time really are different. The state faces a fiscal crisis that President Cyril Ramaphosa has neither the wherewithal nor the institutional tools to escape from. His factional opponents preach a “radical economic transformation” that offers nothing whatsoever to workers.

Social strains look set to keep accumulating. But assuming that any crisis they produce will automatically redound to the Left’s benefit would be folly. That will only happen if we have the political vision and the organisational capacity to ensure that class becomes the fault line of social polarisation. And for that we need to face up to the challenge of constructing a new party.

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Is a Plutocratic America in Terminal Decline?

We may not be aware of it yet, because of the hold the nation has on global media, but America’s decline appears to be terminal.

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Is a Plutocratic America in Terminal Decline?
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As President Joe Biden begins to get comfortable in the White House, there are those who might say that America, under a democratic system of government, has once again allowed the voice of her people to be heard, and that they have elected a new leader into office. Some might go so far as to say that the world’s most affluent democracy has once again proved that government of the people, by the people, for the people is alive and well.

But just below the surface, there are questions deserving of a deeper examination. One is how narrow the margins of victory were. For while it is true that President Biden won the highest number of votes in American electoral history, it is also true that President Trump won the second-highest number of votes in American electoral history; 10 million more people voted for President Trump in 2020 than did so in 2016. Mr Biden’s margin of victory in Georgia was 0.48 per cent, while that in Arizona was 0.63 per cent. Further, even as the Democrats belatedly won a majority in the Senate, again by the finest of margins, the Democratic majority in the House of Representatives actually narrowed. Why, if the choice was so clear, were margins so narrow?

The regrettable truth is that the US is not a democracy – not merely because true democracy has never existed, but because even that imperfect form of democracy that characterises modern politics long perished in America. The United States today is in fact a corporatocracy; mega-corporations rule the country, a polite way of saying that that nation is now a plutocracy. This development is not really new – wealth has always, eventually, determined leadership, in America and elsewhere.

This article attempts – colossally log-in-eye, and at a distance of thousands of miles, admittedly – to furnish proof of the existence of this plutocracy; to demonstrate the effects of this plutocracy on American life and politics; and to establish whether there is any way out of the present morass.

That America is a plutocracy

A total of US$14 billion (KSh1.4 trillion) was spent on campaigns in the US this year, twice as much as in 2016. Where is this money coming from?

In 2010, the US Supreme Court handed down a decision called Citizens United that allowed unions, corporations and associations to spend unlimited amounts in elections provided they would not coordinate their efforts with a candidate. As a result, political action committees (or PACs – private organisations established to raise money in support of a candidate or an issue) morphed into Super PACs that could receive unlimited amounts of money for campaign purposes. The effect was immediate: in 2012 non-party outside spending tripled 2008’s total and topped US$1 billion for the first time. Of that amount, Super PACs spent more than US$840 million.

The regrettable truth is that the US is not a democracy.

Yet the amounts spent in 2012 pale in comparison with spending during the 2020 campaign; in October 2020 alone, outside spending by super PACs and other big-money groups totalled nearly US$1.2 billion. President Joe Biden alone raised US$1.6 billion. President Trump raised US$596 million, itself a significant haul. Given the closely fought nature of the presidential election, it would not be wrong to conclude that money helped tip the scales in favour of the new president. Nor was this true only of the presidential race; it was true across the ballot. Eighty-nine per cent of House races and 71 per cent of Senate races were won by the better financed candidate. The conclusion is clear: money – corporate money – wins American elections.

The effects of the plutocracy on American life

It is all very well and good to conclude that corporate money runs and wins American elections. The issue is what the effect of all this money is on American life. If corporate hegemony is harmless – even beneficial – arguments can be made that it should be left alone. If it is not, however, then that fact should be exposed, and reform commenced.

The American mega-corporation has achieved a number of victories (from a corporate standpoint) that have constituted assaults on the wellbeing of the American people and populace. For example, these corporations have been allowed to outsource American manufacturing jobs to China and other nations. The iPhone, signature product of America’s second largest company by market valuation (Apple), is assembled in Shenzhen. Nike began outsourcing manufacturing in the 1970s; today it has plants in Vietnam and South Korea as well as China. IBM now has more workers in India than in the US. As of April 2012, Walmart’s supply chain included some 30,000 Chinese factories, producing an estimated 70 per cent of all of the goods it sells. This trend has gone on so long that there now exists a portion of the northeastern US, formerly known as the Manufacturing/Steel/Factory Belt, that is now known as the Rust Belt, owing to industrial and economic decline occasioned by outsourcing and the automation of jobs.

Meanwhile, for those jobs that have escaped being shipped overseas, the average wage has been stagnant for 40 years. A generation has now arisen in America that will be the first in modern American history to end up poorer than their parents. To make up for stagnant incomes, American citizens are drowning in private debt (US$14 trillion worth) including mortgages (US$9.44 trillion) and student loans (US$1.5 trillion). Indeed, absolute US household debt was higher in November 2019 than prior to/during the great recession, although the debt-to-income levels during the great recession were higher than the 2019 levels (83 per cent to 73 per cent). High house prices, supported as they are by mortgage lending, coupled with student loans, together mean that new graduates are experiencing “failure to launch”, i.e. the inability to leave one’s parents’ home and start one’s own family.

(We should pause here to note, parenthetically, that the level of any nation’s private debt, and America’s in particular, is a very important metric. The level of private debt was the key indicator that enabled Professor Steve Keen, one of the Bezemer 12, to predict the North Atlantic financial crisis of 2007-8, a prediction mainstream/neoclassical economics, quite criminally, failed to make.)

The US$14 trillion of private debt that American citizens owe is owed to the very same mega-corporation class whose wage stagnation has necessitated the need for lending (since the early 1970s, the hourly inflation-adjusted wages received by the typical worker have barely risen, growing only 0.2 per cent per year). Most unfortunately, this wage stagnation is not uniform: the ratio of CEO-to-worker earnings has soared from 21-to-1 in 1965 to 320-to-1 in 2019.

A generation has now arisen in America that will be the first in modern American history to end up poorer than their parents.

Has the American mega-corporation been censured by the political class for these excesses? Hardly. In fact, the large American corporation, while using American infrastructure, using some degree of American labour and selling to Americans, is allowed to pretend that it operates outside America, by invoicing from nations with low tax rates, such as Ireland, thereby avoiding paying federal taxes on its income. From 2009-2018, for example, Amazon paid an effective federal tax rate of 3 per cent on profits totalling US$26.5 billion. In 2018 alone, the company received a tax relief of US$129 million dollars on profits of US$11.2 billion. Such is the scale of tax avoidance by American corporations that by 2016 a staggering US$2 trillion in untaxed corporate profits was stashed outside the US, according to the New York Times. (What makes this doubly lamentable is that the Internal Revenue Service tells the American citizen in unambiguous terms that “Your worldwide income is subject to U.S. income tax, regardless of where you reside.”)

Corporations, therefore, enjoy egregious advantages. It is in order to keep them that they are so willing to fund political campaigns. In other words, corporations will do everything to avoid paying the taxes that would improve American infrastructure and healthcare (to their own benefit) but spend billions on political campaigns to inoculate themselves from losing the unfair advantages they have carved out for themselves.

The effect of the plutocracy on American politics

The shock election of President Donald Trump in 2016 can be seen as a response to the deleterious effects of corporate hegemony on the American political and economic life. Candidate Trump campaigned as an outsider, promising to “drain the swamp”, even though, ironically, he was himself a self-styled billionaire who shipped jobs to China and paid very little in taxes. America was suffering economically. He claimed that the blame for this could be placed squarely on the shoulders of China and immigrants. In an illuminating two-part, three-and-a-half hour 2019 interview with PBS, key Trump campaign advisor Steve Bannon (who was arrested for fraud and then pardoned by President Trump on his last full day in office) stated that the cost of the 2008-09 bailout was loaded onto the American middle class, and that American gig economy millennials are nothing but 19th-century Russian serfs. Many may disagree with Mr Bannon’s political views, but his statement had its finger on the pulse of post-bank-bailout America. The genius of the Trump campaign was its ability to identify these pain points; to incorrectly but convincingly blame foreigners – locally (immigrants) and abroad (China) – for what were and continue to be the excesses of the plutocracy; to identify the existence of a swamp in Washington and characterise Hillary Clinton as the personification of these ills; and to ride that wave all the way to the White House. The lesson – a lesson seemingly yet unlearned by mainstream politics – is that it actually worked.

Candidates however, campaign in poetry; rulers, on the other hand, govern in prose. During Trump’s presidency Faustian bargains, in Steve Bannon’s words, were made; here again the power of the corporatocracy made itself felt. One of the early indicators of the direction and tenor a presidency will take is a president’s cabinet picks; Steven Mnuchin, yet another ex-Wall Street executive, was placed in charge of the Treasury. While President Trump did not drag the US into another war – in spite of the assassination of Iranian Major-General Qassim Soleimani – his presidency did not up-end Washington in ways meaningful to the nation’s citizenry. Readers may recall the US$2 trillion of untaxed corporate profits mentioned earlier; President Trump’s signature legislative achievement was to open new windows for tax rebates for major corporations, reducing taxes on the wealthy. This legislation resulted in the repatriation of US$777 billion in 2018, but the Federal Reserve noted that “the strongest effect of repatriation was on share buybacks” by corporate America. This particular episode is a textbook example of the plutocracy at work.

Trump does not greatly differ in this way from the way in which Candidate Obama contrasts with President Obama. Candidate Obama campaigned on Change We Can Believe In. Yet, once elected, he bailed out the banks (the abiding question on this, some wonder, is why citizens did not retain their houses if the banks’ losses were made good). Obamacare, a very significant advance in the fight for decent healthcare for Americans, did not include a public option although it could have. Nor did President Obama succeed in extricating himself from American warmongering abroad: in a particularly sad and tragic episode he helped end the Libya Gaddaffi had created. Libya under Gaddaffi was a nation that had free university education, free healthcare, no external debt and reserves of US$150 billion – all ideals that America, ironically, declares it wants but has yet to achieve despite its claim to being the richest nation in history. Allied “intervention” replaced that Libya with today’s bombed-out nation, in which incessant internecine strife went on for a decade. This in Africa, the land of Obama’s fathers. Only two years previously, at a location just two hours from Benghazi by air, the new President had given his “A New Beginning” speech in Cairo, which speech contributed to his winning the Nobel Peace Prize later that year.

In these two presidencies, we see, microcosmically, the effects of the plutocracy at work: the lofty ideals of the campaigning candidate and the searing needs of the masses, once office is assumed, are replaced by a kind of neutered, ineffective pragmatism, as far as the wellbeing of American citizens is concerned, and a sly and insidious effectiveness where corporate welfare is concerned.

The 2020 campaign

Perhaps the defining characteristic of the 2020 campaign is that it took place against the backdrop of a global pandemic. The cost of this pandemic – in the gruesome currency of American lives – has been more than 500,000 dead Americans and counting, nearly 10 times the number of US soldiers who died in the Vietnam War, and more than the number of American lives lost in World War II.

Uniquely among developed nations, the structure of America’s healthcare system is such that very often one only has healthcare if one is employed. So that when 44 million Americans filed for unemployment during the pandemic, they lost their medical cover at precisely the time they most needed it. The pandemic therefore threw into sharp focus the critical importance of having a healthcare system that is not based upon employment.

(Nor is the state of health insurance all that is wrong with American healthcare – in several tragic articles it has been reported that American diabetics have been driving to Canada in caravans to buy insulin – some driving up to 5 hours one way. Price-gouging by pharmaceutical companies means that the drug is ten times cheaper in Canada than it is in America.)

The bipartisan response to the pandemic was to pass the Coronavirus Aid, Relief, and Economic Security (CARES) Act that – while it gave individuals with less than US$99,000 a year annual income a check of US$1,200 a month – also gave further tax cuts to the wealthy. According to the nonpartisan Joint Committee on Taxation, just 43,000 individual tax filers covered by one of the Act’s provisions would see their tax liability fall by a combined US$70.3 billion in 2020 (or about US$1.7 million each). This is the America that corporatism has created.

And yet, mid-pandemic, was healthcare on the national ballot? How, when pharmaceutical and health product industries have spent a total of US$4.7 billion on lobbying the federal government, US$877 million on state candidates and committees, and US$414 million in the 20 years to 2018? Indeed, by the time he won the nomination, Joe Biden had already said he would veto a Medicare for All bill if it landed on his desk (a colossal if, it must be said), proposing a public option instead.

So what was on the ballot? Democrats, choosing to characterise Trump’s presidency as the problem, instead of seeing it as the natural consequence of the decades of wage stagnation, high healthcare costs, inordinately high levels of private debt, etc., campaigned on the platform of “restoring the soul of America”. The president’s narrow margins of victory perhaps find an explanation here: the problems Americans face were not really on the ballot. And they were not on the ballot because the corporations that stump up the money to fund electoral campaigns benefit from providing privatised solutions to the problems Americans face.

Is there hope?

There is an American constituency that is in broad agreement on the issues raised above: a Fox News exit poll, for example, showed that 72 per cent of Americans were at least somewhat in favour of changing to a government-run healthcare plan. Florida, a state President Trump won, voted to increase the state’s minimum wage to US$15 an hour.

However, it is unlikely that this broad constituency will be allowed to unite under the current political system. The reality is that the US is a de facto one-party state. If that party were to be honestly named, it might be named the Megacorp Party, or, slightly more genteelly, the Corporatist/Establishment Party. It has two wings: a supposedly left-leaning Democratic wing and a supposedly conservative Republican wing. Under the framework of Citizens United these two wings will continue to swap power ad infinitum. Yet, even as the presidency bounces from party to party, a president from one party will bomb Iraq; the next president, from the other party, will campaign on the platform that he never voted to go to war in Iraq, only to subsequently bomb Libya. These tragic contradictions find their resolution in the fact that this war activity happens at the behest of the military-industrial complex.

Political consultants will keep finding new, misleading ways of “framing the political argument,” creating false choices and developing narratives such as restoring the soul of the nation. Meanwhile, the money that pays them will continue to fortify itself against the needs of the people; the rich will get richer, the poor will get poorer and power will remain with the wealthy.

As long as this continues, we can expect two outcomes. The first is that the issues that Americans need solved will not be solved. (We are now reading, for example, that the US$15 dollars/hour minimum wage President Biden promised (during a presidential debate), is unlikely be included in the US$1.9 trillion-dollar stimulus package President Biden intends to bring to Congress.) The second is that, as a result of the failure to resolve these issues, America will, in the words of Robert Reich, continue to produce candidatures like Donald Trump’s as far as the eye can see. The American political system does not contain within itself the mechanism to correct the current malaise. As a result, money will continue to win out: it will continue to select which issues are on the ballot, and it will continue to choose which candidates win. America’s long decline, therefore, is likely to continue.

The corporations that stump up the money to fund electoral campaigns benefit from providing privatised solutions to the problems Americans face.

We may not be aware of it yet, because of the hold the nation has on global media (the concentration of media ownership in America is yet another triumph of the plutocracy), but America’s decline appears to be terminal.

I return to the beginning – this article is written colossally log-in-eye. As a Kenyan I know we have major, pressing domestic issues to resolve. If or as we make a detour to examine the American political situation, let our contemplation resemble our use of a mirror, and let our aims be those of helping us to avoid the problems others have experienced, in order to more wisely and speedily resolve our own.

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