Is government becoming irrelevant?

[Ed Weick]

The following article, in todays Globe and Mail, raises some interesting questions about the future of democracy and the representativeness and inclusiveness of government.    Ed Weick   The rich shall inherit the Earth Modern governments are increasingly beholden to business, says journalist JOHN LLOYD. Not necessarily a good thing JOHN LLOYD Monday, March 19, 2001, Globe and Mail Oligarchy, the rule of the rich, is on its way back. In the world's biggest states -- China, India, the United States, Russia -- it is the governing spirit of the times. This is no accident: If the 20th century was the century of the common man, the 21st looks set to be the century of the wealthy. The Russians are the pioneers, just as they were with communism a hundred years ago. Boris Yeltsin's "court" or "family" was paid for by Russia's business oligarchs. Cabinets were appointed by them, the country's resources divided up among them. With the collapse of the Soviet Union and the end of the Communist Party as its executive authority, nothing could fill the vacuum but the new business-cum-criminal class. It had the money; it controlled the power. The United States is a very long way from post-Soviet Russia, but its new cabinet has a lot of money, and represents the interests of people with a lot more. President George W. Bush was himself a small and not particularly successful businessman in Houston before he became the governor of Texas. The Treasury Secretary, Paul O'Neill, is the former president of Alcoa -- the world's largest aluminum producer -- who saw no conflict in retaining his $90-million-plus stock options in the company. The Republicans -- like the Democrats -- had the backing of hundreds of millions of business dollars behind the presidential campaign. Unlike the Democrats, however, the Republicans' business contributions were not offset by money from the labour movement, though populist, faith-based groups provided large sums. The new administration owes nothing to a labour movement already weaker than it was in the 1990s. Capital rules. It provides both a left -- drawn largely from the media and show business, with some financiers and New Economy types -- and a right -- clustered around energy, industry, property and banking. For much of the past century, Western governments had to pay attention to the two great interest blocs: capital and labour. In the new century, they need to pay attention only to capital. Business and the ideas associated with it have become the dominant way of thinking. The critical work in this area was Francis Fukuyama's 1989 essay, The End of History,a work much reviled but whose thesis is virtually a clich�. It is that, after the end of communism, there is no longer any global competition, in the world of theory and ideology, to what Prof. Fukuyama called "liberal capitalism." The consequences of that are now becoming more obvious. Politics, whether by governments of the left or right, puts business at its centre. It wants to encourage business to invest, to supply people trained in the right way for business; to nurture it with low taxes and cajole it into less desirable areas with grants and tax holidays. It competes with other countries for its presence and vies with other political leaders for the acquaintanceship of the business superstars, led by Bill Gates. Business, says German sociologist Ulrich Beck, has now won the war of power by doing the opposite of what it used to take to win wars. The threat to our contemporary societies, Prof. Beck said last month at the London School of Economics, "is not of an invasion of capital, but of its being taken out of a country." He added: "The one thing worse than being overrun by international investors is not being overrun by international investors. Capital is not tied to location -- it shifts about the world constantly. What governments now fear is the opposite of capital conquering their state -- they fear it not conquering their state." This situation is a byproduct of greater globalization, and the freedom it has given to big capital. But there is another, newer, more insidious threat. It is that capital has begun to replace government in the first place, by paying for it to get there. In almost every rich country, the memberships of political parties are falling. Britain's Conservative Party, once one of the largest parties in the world with three million members just after the Second World War, now has a 10th of that number. The trend applies to almost every other country -- politics is no longer seen as a useful way of spending time. Those who still wish to express public spirit join activist groups or charities. Others just drop out. Neither group pays their party dues. Parties across the advanced world began to lose more and more of their regular income, just as spending on elections went up. This is especially true in the United States, where campaign spending can be unlimited and where the parties' inability to mobilize large numbers of activists leads them to spend more on expensive advertising. And where does the money come from? The wealthy business class. "As TV time becomes more and more expensive," wrote Mark Danner in The New York Review of Books last September, "the American political world has come increasingly to resemble republican Rome, in which the wealthy and powerful expend their largesse to make it possible for their chosen candidate to reach, and thereby seduce, the masses." Even leftist parties, led by British Labour, have dropped their inhibitions about enrolling business in their fundraising drives -- while, at the same time, business has begun to realize that most centre-left parties hold no danger for free enterprise. Tony Blair's government, now coming up to a general election, has more business people in it than all previous Labour governments combined -- including the former head of BP-Amoco, one of the world's biggest energy companies, and the former head (and owner) of one of Europe's biggest supermarket chains, Sainsbury. Elsewhere, the relationship of business to government is expressed less openly. In China, the sons of the leaders of the Communist Party, practically immune from legal action while their fathers hold power, deal with foreign capitalists in order to bring companies into China. Hu Angang, of the Chinese Academy of Sciences, shows that corruption in China may be as much as 8 per cent of its GNP. In India, leading commentators say the world of defence contracts is now wholly corrupted, with foreign and domestic arms suppliers "buying" officials and politicians to secure orders. Neither China's communism nor India's nationalism are any longer a prophylactic against the absorption of their political structures into business strategies. Later this spring, we are likely to see another significant advance in this trend. The Forza Italia party of Silvio Berlusconi, one of Europe's richest men and the biggest media magnate in Italy, is favoured to win the Italian general election. As the leader of the largest party in a coalition of the right, Mr. Berlusconi will become prime minister. The media business, now among the most powerful on the globe, will have -- for the first time -- one of its princes in direct state power. Mr. Berlusconi has been quite direct with Italians tired of constant changes in government. He says that, as a businessman, he is more likely to be efficient, to cut the red tape and the endless talk, and to set the country to rights. Need this be bad? Maybe not. Many of the business people who go into government do so as a public service, and professional politicians generally still command the government. The problem, though, lies deeper than attitudes of the businessmen-turned-politicians. It is that they will seek to make politics into their own image of success: an efficient, goal-oriented corporation. But democratic politics is the art of mediation; it is an activity that tries to reconcile competing groups, and it must stand above the powers that be. Efficiency should be the byproduct, not the only reason for existence. That is the way that government has been thought of as working in modern times. It is what Prof. Fukuyama meant when he described it as liberal capitalism. The question now: Is capitalism threatening liberalism? John Lloyd, a former editor of The New Statesman and Moscow bureau chief of the Financial Times, is a London-based journalist.