Bannon and Trump Joined in Mercantilism

When Steve Bannon was in President Trump’s crosshairs a couple months ago and it looked as if he was going to receive the Apprentice reject treatment the question was how different would Trump’s agenda become if Bannon was kicked to the curb. It was generally agreed that not much would change because, as Perry Bacon Jr. pointed out, Trump was the way he was before Bannon climbed aboard the campaign. Indeed, Trump and Bannon have a shared mercantilist view of capitalism and that’s why they hit it off and have meshed so well. In a 2014 speech at the Vatican, Bannon described the “enlightened capitalism” he espouses, which echoes the mercantilist concern with the sense of mutual obligation and responsibility between countrymen and, consequently, the distribution of wealth for the general welfare:

“I want to talk about wealth creation and what wealth creation really can achieve and maybe take it in a slightly different direction, because I believe the world, and particularly the Judeo-Christian West, is in a crisis… This will be looked at almost as a new Dark Age. But the thing that got us out of it, the organizing principle that met this, was not just the heroism of our people…that fought this great war… The underlying principle is an enlightened form of capitalism, that capitalism really gave us the wherewithal. It kind of organized and built the materials needed to support, whether it’s the Soviet Union, England, the United States, and eventually to take back continental Europe and to beat back a barbaric empire in the Far East. That capitalism really generated tremendous wealth. And that wealth was really distributed among a middle class, a rising middle class, people who come from really working-class environments and created what we really call a Pax Americana… And I believe we’ve come partly offtrack in the years since the fall of the Soviet Union and we’re starting now in the 21st century, which I believe, strongly, is a crisis both of our church, a crisis of our faith, a crisis of the West, a crisis of capitalism… Now, what I mean by that specifically: I think that you’re seeing three kinds of converging tendencies: One is a form of capitalism that is taken away from the underlying spiritual and moral foundations of Christianity and, really, Judeo-Christian belief. I see that every day. I’m a very practical, pragmatic capitalist… I was as hard-nosed a capitalist as you get…But there’s a strand of capitalism today—two strands of it, that are very disturbing. One is state-sponsored capitalism… where you have this kind of crony capitalism of people that are involved with these military powers-that-be in the government, and it forms a brutal form of capitalism that is really about creating wealth and creating value for a very small subset of people. And it doesn’t spread the tremendous value creation throughout broader distribution patterns that were seen really in the 20th century… However, that [Randian Objectivist] form of capitalism is quite different when you really look at it to what I call the “enlightened capitalism” of the Judeo-Christian West. It is a capitalism that really looks to make people commodities, and to objectify people, and to use them almost—as many of the precepts of Marx… I think it really behooves all of us to really take a hard look and make sure that we are reinvesting that [wealth] back into positive things.”

Bannon was right to think that capitalism went off the rails after the dissolution of the Soviet Union because, as David Graeber points out, the generous post-war era capitalism that Bannon lauds shared the wealth as much as it did due to the ideological Cold War challenge of Bolshevism:

“The period when capitalism seemed capable of providing broad and spreading prosperity was also, precisely, the period when capitalists felt they were not the only game in town: when they faced a global rival in the Soviet bloc, revolutionary anti-capitalist movements from Uruguay to China, and at least the possibility of workers’ uprisings at home. In other words, rather than high rates of growth allowing greater wealth for capitalists to spread around, the fact that capitalists felt the need to buy off at least some portion of the working classes placed more money in ordinary people’s hands, creating increasing consumer demand that was itself largely responsible for the remarkable rates of economic growth that marked capitalism’s “golden age”. Since the 1970s, as any significant political threat has receded, things have gone back to their normal state: that is, to savage inequalities, with a miserly 1% presiding over a social order marked by increasing social, economic and even technological stagnation.”

So the only guaranteed way to get capitalism back on track—where there is a voluntary sharing of wealth to minify the natural, savage inequalities of capitalism—is for there to be an atmosphere where the capitalist class has to battle with antagonists that present economic alternatives. This could explain why Washington has been seeking a replacement ideological Great Power enemy and why Bannon is fixated on hyping up radical Islam as the titanic threat of our time. But such a helpful foe is still nowhere in sight and may never be for, as Graeber notes, “Since no one in their right mind would wish to revive anything like the Soviet Union, we are not going to see anything like the mid-century social democracy created to combat it either.” Bannon’s clarion call for a return to “enlightened capitalism” will hit another snag. Take for example Nick Hanauer’s argument–addressed to his fellow plutocrats–on the benefits of a higher minimum wage to both them and society. While his colleagues in corporate America would agree that Hanauer is technically correct in the short-term, they also know paying their employees more will end up being bad for capitalism in the long run as the working class, enjoying their rising riches, begins to demand more and more. Errico Malatesta summed up the phenomenon thus: “If [workers] succeed in getting what they demand, they will be better off: they will earn more, work fewer hours and will have more time and energy to reflect on things that matter to them, and will immediately make greater demands and have greater needs.” It wouldn’t be long at all before they started demanding the full value of the product of their labor and workplace democracy.

In all, it looks like bad news for Bannon’s dream of reviving “enlightened capitalism” but it’s a grand opportunity—though a nightmarish one in Bannon’s eyes—for us to go beyond capitalism altogether. “If we want an alternative to stagnation, impoverishment and ecological devastation,” concludes Graeber, “we’re just going to have to figure out a way to unplug the machine and start again,” instead of doing what Piketty and Bannon hopes will work—that is, “try to build a slightly smaller vacuum cleaner sucking in the opposite direction” to ineffectively counter a “gigantic vacuum cleaner sucking wealth into the hands of a tiny elite.”

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