Second in a four-part series.
by Edward Martin and Mateo Pimentel / May 14th, 2015
In
Part One
of this series, we argued that anarchy is the solution to the problem
of oligarchic control of democratic institutions. This holds true for
economic institutions as well. And no better example can be provided
than Obama’s sinister Trans-Pacific Partnership (TPP), which is designed
in neoliberal fashion to financially reward the 1 percent on Wall
Street and the 1 percent internationally, because it is all about the
international elite, not just the average people in the United States
who are expendable under the TPP arrangement. Obama knows this. We argue
that it is not just anarchism that will salvage democratic
institutions, but also a Marxist economic vision that refuses to allow
workers in the United States and international community to be
exploited. Marx was correct when he argued that capitalism rests
essentially on the exploitation of the working class. The problem
remains one of conflict between labor and capital, which people like
Paul Krugman the Keynesian and journalists like Chris Matthews the
liberal refuse to acknowledge. The TPP is not some Greek tragedy where
the actors are blind to their own demise; rather, they know completely
what the outcomes are going to be for themselves at the expense of
others. Read
Development, Democracy and Welfare States: Latin America, East Asia, and Eastern Europe
by Stephan Haggard and Robert R. Kaufman (2008)—they saw this coming.
This is the motive for Occupy and why the oligarchy has got to go. What
this form of globalization accomplishes is simply a reinforcement of
neocolonialism and neoimperialism. In the third part of this series, we
will pull apart the TPP, which is nothing more than NAFTA on meth. The
following is our continuation of why oligarchies are perpetuated in
democratic institutions.
Domination and Control of Institutions
Individuals who have ultimate authority in an organization are the
ones who have the final decision-making power over the organization’s
system of rewards or punishments, its budget and personnel, its policies
and property. This means that enforceable authority has the power to
exclude others from control over it. Organizational proprietors exercise
“ultimate authority” and are invested, not solely by tradition or
sentiment, but by state charter with the right to deal with the
organization’s incorporated resources. Directors, trustees, and owners
exercise power either by occupying the top positions in which ruling
decisions are made or by hiring and firing those who do. William Domhoff
asserts that:
…control is in the hands of the board of directors, a
group of men usually numbering between ten and twenty-five who meet once
or twice a month to decide upon the major policies of the company. In
addition … the board always includes at least the top two or three
officers in charge of day-to-day operations … We consider the boards
decisive because, despite the necessity of delegating minor decisions
and technical research, they make major decisions, such as those of
investment, and select the men who will carry out daily operations. In
fact, their power to change management if the performance of the company
does not satisfy them is what we … mean by control.
Consequently, Michael Walzer observes that the directors of most organizations:
…preside over what are essentially authoritarian regimes
with no internal electoral system, no opposition parties, no free press
or open communications network, no established judicial procedures, no
channels for rank-and-file participation in decision making. When the
state acts to protect their authority, it does so through the property
system, that is, it recognizes the corporation as the private property
of some determinate group of men and it protects their right to do,
within legal limits, what they please with their property. When
corporate officials defend themselves, they often involve functional
arguments. They claim that the parts they play in society can only be
played by such men as they, with their legally confirmed power, their
control of resources, their freedom from internal challenge, and their
ability to call on the police.
The boards of directors of most business firms do not exercise a
“collegial” power except in the formal, legal sense. In other terms,
even among themselves directors seldom operate democratically since
usually one or two of them enjoy a preponderant influence over the
corporation. Bruce Berman notes that private power is exercised both “in
the economy and society” through “organizations whose internal
political processes are, with few exceptions, authoritarian, oligarchic
and devoid of any democratic procedures or controls.” Where the board of
directors consists of corporate employees dependent on the president
for career advancement, the board simply reaffirms past decisions or
presents modest but inconsequential changes. Top corporate managers,
themselves board members and large stockholders, are the active power
within a firm, selecting new members, exercising a daily influence over
decisions, and enjoying a degree of independence. This same scenario can
easily be translated into nonprofit institutions, education, churches,
government, unions, administration and policy. Furthermore, the
institutionally controlled roles are themselves so legitimized by
practice and custom, that the coercive element of this oligarchic
arrangement is in effect disguised.
It appears evident, at least from what has been discussed, that
authority is delegated downward within an organizational system and
institutional structure and that it is extended, in anti-democratic
fashion, in order to better serve those at elevated levels. Ralf
Dahrendorf states:
For the bureaucrats the supreme social reality is their
career that provides, at least in theory, a direct link between every
one of them and the top positions which may be described as the ultimate
seat of authority. It would be false to say that the bureaucrats are a
ruling class, but in any case they are part of it, and one would
therefore expect them to act accordingly in industrial, social and
political conflicts.
Rousseau refers to people in this elite category as persons “hurried
on by blind ambition, and, looking rather below than above them, come to
love authority more than independence, and submit to slavery, that they
may in turn enslave others.” Interestingly enough, Adam Smith also
identifies this anti-egalitarian tendency when he states:
All inferior shepherds and herdsmen feel the security of
their own herds and flocks depends upon the security of those of the
great shepherd or herdsman; that the maintenance of their lesser
authority depends upon that of his greater authority, and that upon
their subordination to him depends his power of keeping their inferiors
in subordination to them.
The monopolization of privileged positions and scarce resources by
the hierarchical elite in an organization is justified by the claim that
only experienced persons or trained experts have the expertise to
participate in decision-making. However, Francis Rourke and Glen Brooks
state the organizations and institutions are “often forced to put on a
dramatic show of scientific objectivity in its budgeting process in
order to justify its requests for continued support, even though the
dramatic props – elaborate formulas, statistical ratios, and so on – may
have little to do with the way in which decisions are actively made
within the … establishment.” Thus, a modern hierarchical organization
with its elaborate stratification of command and fragmentation of tasks
may itself be less the outgrowth of technical necessity and more a means
whereby the few control the many. Consequently, Michels argues that
the bureaucratic structure within organizations has two main functions:
efficiency and class domination. The former is admitted, open and
manifest; the later covert, unrecognized (by many) and unadmitted. In
this sense, class conflict declines with the growth of bureaucracy, not
because bureaucracy’s efficiency and productivity satisfies potential
dissenters, but because the
structural features of bureaucracy
stifle the power resources of potential dissenters. It would therefore
be correct to say that bureaucratization is another form of class
conflict, a form in which one side wins and the other loses—and which
might better be called class domination.
Organizations and Their Enlightened Self-Interest
Most organizations, arguably, are linked by a commonality of class
interest. The common misunderstanding is to treat the diversity of
organizations as a manifestation of the diffusion of power. Robert Lynd
states that, “sheer multiplicity of organizations in society may not be
assumed to indicate their discreteness and autonomy …” More often than
not, the interaction of power between organizations and institutions is
neither voluntary nor equal, since some institutions “occupy positions
of established dependence upon other institutions.” This presupposes a
distribution of power that some organizations possess more than others.
Consequently, the resources of power are not randomly scattered among
the population to be used in autonomous ways, but are distributed within
a social system, and the way the system is organized has a decisive
effect on what resources are available to whom. Any delineation of the
resources of power would include property, wealth organization, social
prestige, social legitimacy, number of adherents, various kinds of
knowledge and leadership skills, access to technology, control of jobs,
control of information, manipulation of symbolic expressions, and the
ability to apply force and violence. Thus, if organizations and
institutions have power as their major interest, and the maintenance of a
class dominated society, then it can logically be concluded that there
are elements in society that lack power. Lacking accessibility to power
resources, certain classes of people will chronically gain a deficient
share of necessities. These people, mostly children in the United
States, do not participate as decision makers in most of the
arrangements directly affecting their lives. They have no lobbies, no
voice in the political system, no appeal from the vested interests of
certain adults. The elderly, women, handicapped, and people of color, at
least those in lower social classes, can be considered among the
powerless in society as well.
Every privileged class tends to propagate the notion that the
existing social system constitutes the natural order of things. In this
way, those elite members of organizations give legitimacy and permanence
to their position. These elites, according to Weber, intend “to have
their social and economic positions ‘legitimized.’ They wish to see
their positions transformed from a purely factual power relation into a
cosmos of acquired rights, and to know that they are thus sanctified.”
The legitimating myths, or “status-legends” serve not only to bolster
the self-esteem and soothe the conscience of the elite within
organizations, but reinforce the important function of assigning an
almost divine status to class dominance and the rule of elites within
organizations. Rousseau captures this same idea when he states that “the
strongest is never strong enough to be always master, unless he
transforms his strength into right, and obedience into duty.” This can
be seen in present day capitalist societies; profit and property are
represented as serving not only the owning class but also all citizens.
What corporations do for themselves is said to benefit the entire “Free
World.” In the
German Ideology Marx identified this tendency in
which every group seeks to give “its ideas the form of universality and
[attempts] to present them as the only rational and universally valid
ones.” Both Marx and Engels held that throughout history, and in
particular the historical development of capitalism, that government had
been controlled by key capitalists and their allies, and thus the state
in effect serves as the “executive committee” of the ruling and
exploiting class.
In a society based on acquisition and competition, people acting in
their self-interest do not readily sacrifice their own class advantages
out of regard for the needs of others. Any notion of justice, based on
utility maximizing, is not likely to compel “individual actors” to cast
aside their own privatized pursuits. The history of class divided
societies offers little hope to those who do not share in the relative
access of resources in the midst of scarcity. In the absence of its
natural defenders the interest of the excluded is always in danger of
being overlooked according to both Mill and Marx. Theorists such as
Lindblom and Woodhouse state that the common understanding is that, “the
fundamentals of the existing system of wealth and privilege ought not
be challenged.” Moreover, borrowing from Lenin’s critique of Western
imperialism, Martin Luther King in the “Letter from Birmingham Jail,”
concludes that “history is the long and tragic story of the fact that
privileged groups seldom give up their privileges voluntarily.” And
Obama has become a team player for the privileged elite because of the
TPP treaty.
Thus, the threatened loss of power in organizations, and the tendency
toward a more equal distribution of wealth and privilege, is seen not
merely as a material loss, but as the cataclysmic undoing of all social
order. Operating on the assumption that all distribution must be
competitive rather than communal, the elite anticipate – correctly –
that more material resources for the marginalized will only mean less
for themselves, since a fundamental reordering of social priorities
would entail a marked diminution of class privileges for the elite.
Within this social and economic setting the reality of conflict is
spawned and determined, according to Marx, precisely because “men make
their own history; but they do not make it just as they please; they do
not make it under circumstances chosen by themselves, but under
circumstances directly encountered, given, and transmitted from the
past.” Here Rousseau and Marx agree, arguing that the elite of any
organization enjoy their status “only in so far as others are destitute
of it. Because, without changing their condition, they would cease to
be happy the moment the people ceased to be wretched.” Consequently,
Rousseau argues that “we find our advantage in the misfortune of our
fellow-creatures, and the loss of one man almost always constitutes the
prosperity of another.” Noam Chomsky even goes so far as to state that
organizations such as these are “designed to undermine democratic
decision making and to safeguard the matters from market discipline. It
is the poor and defenseless who are to be instructed in these stern
doctrines.”
Oligarchy as the Iron Law
Weber examines the relationship between democracy and bureaucratic
organizations and discovers a paradoxical relationship between the two
institutions. Some legal requirements further democracy as well as
bureaucracy, such as the principle of “equal justice under the law.”
This would also include technical and scientific knowledge rather than
arbitrary decisions. Nevertheless, according to Weber, “‘democracy’ as
such is opposed to the ‘rule’ of bureaucracy, in spite and perhaps
because of its unavoidable yet unintended promotion of
bureaucratization.” A major reason for this is that bureaucracy
concentrates power in the hands of those in charge of the bureaucratic
apparatus and thereby undermines democracy. Robert Michels, in
Political Parties,
also argues from another perspective, that a number of complex
tendencies in organizations oppose the realization of democracy. He
postulates that democracy leads to oligarchy and consequently the elite
domination of policy outcomes. Michels goes on to state:
It follows that the explanation of the oligarchical
phenomenon which thus results … from the consolidation of every
disciplined political aggregate … reduced to its most concise
expression, the fundamental sociological law of political parties (the
term ‘political’ being here used in its most comprehensive significance)
may be formulated in the following terms: ‘It is organization which
gives birth to the dominion of the elected over the electors, of the
manditaries over the mandators, of the delegates over the delegators.
Who says organization says oligarchy.
Michels’ thesis in the “iron law of oligarchy,” challenges Rousseau’s
concept of direct popular rule and both Madison and Jefferson’s
representative form of democracy. The dysfunctional nature of existing
democracy, for Michels, is not simply the result of social and economic
underdevelopment and alienation, inadequate education, media control of
propaganda advertisements, or the capitalist control of government
organizations and institutions. Rather, the problem of democracy is
rooted in its organic nature, and according to Michels’ logic, any
organization must confront its tendency to be controlled at the top. He
states, “The formation of oligarchies within the various forms of
democracy is the outcome of organic necessity, and consequently affects
every organization.” This phenomenon, for Michels, is an intrinsic
dimension of bureaucracy and any large-scale organization or
institution. As a result, “Every party organization represents an
oligarchical power grounded upon a democratic basis. We find everywhere
electors and elected. Also we find everywhere that the power of the
elected leaders over the electing masses is almost unlimited. The
oligarchical structure of the building suffocates the basic democratic
principle.” Thus large-scale social organizations and democracy are
incompatible, which is a position similar to Lowi’s notion that elitist
interest-group liberalism undermines democracy and Olson’s theory that
large groups fail to identify and act on their self-interest, reinforce
Michels’ position that the elite emerge from democratic dysfunction to
dominate organizations. Michels found that even socialist organizations
and trade unions that valued democracy could not pursue their goals,
even with strong leadership. From this Michels proposed a general law
that “the majority of human beings … are predestined by tragic
necessity, to submit to the dominion of a small minority, and must be
content to constitute the pedestal of an oligarchy.”
The underlying notion of a liberal democracy is that government
organizations and institutions are to be administered in a democratic
fashion by majority rule, respect for minority rights, freedom of speech
and dissent, based on a constitutional framework. On the other hand,
while democratic values and policies are to be implemented, the task
must be implemented through the most efficient and effective
administrative methods available. Therefore agencies, governed primarily
by the principle of efficiency and effectiveness, tend to act in an
autocratic fashion. Nevertheless, if Michels’ argument is a sound one,
then the implications for government are startling:
organizations and their subsequent policies are held captive by an elite clientele.
The reality of an elite ruling government agencies, and for that
matter, political parties, unions, religious organizations, etc.,
conveys the idea that popular rule is subverted. This leaves little
doubt organizations and institutions by their very nature are
predisposed inherently to being co-opted by an elite faction.
Thus organizations and institutions are designed to serve the interests of an elite cadre and not its rank and file members.
In summary, the “iron law of oligarchy,” with respect to democratic
organizations and policy outcomes, functions in four different
capacities. Organizations and policy outcomes: (1) mobilize the forces
of indoctrination and formal socialization in the direction of
established interests and dominant values; (2) control the means of
rewards and punishments based on organizational structures and behavior;
(3) preempt competing behavioral forms and thus structure the
definition of “reality” to the advantage of the elite; and, (4)
reinforce their own existence by preventing any question or ideological
challenge to its purpose and mission. Thus Michels believed that any
organization or political system, democratic or egalitarian, becomes
oligarchic and therefore undemocratic.
• Parts 3 and 4 to follow
Edward Martin is Professor of Public Policy and
Administration, Graduate Center for Public Policy and Administration at
California State University, Long Beach, and co-author of Savage State:
Welfare Capitalism and Inequality;
Mateo Pimentel lives on the Mexican-US border, writing for many
alternative political newsletters and Web sites. He can be reached at:
mateo.pimentel@gmail.com.
Read other articles by Edward Martin and Mateo Pimentel.
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