Notes on the Progress of the Counterrevolution


e are in the midst of a major
counterrevolution in which the governing classes of the West, taking
advantage of the collapse of the Soviet Union, corporate globalization,
increased media concentration and commercialization, the sharp attrition
of labor organization and political influence, and hence the greater
political power of the corporate elite, have been dismantling the
welfare state and non-corporate rights and entitlements and moving
the world toward a laissez-faire and dog-eat-dog—or rather
tiger-eat-rabbit—world. With what is now a global “reserve
army” of fragmented and atomized labor and with no alternative
system currently threatening western elites and impelling them toward
generous treatment of their non-elite majorities, these elites have
rushed toward putting in place a version of the Marxian model of
pure capitalism that had been thwarted by the rise of national labor
movements, the limited mobility of capital, and the now defunct
Soviet and Maoist threats. 

The Politics of Reaction 


he ending of the alternative
model threats, the growing mobility of capital, and capital’s
success in making the global institutional framework more welcoming
to capital have made possible more aggressive class warfare and
the de facto slow-motion counterrevolution now underway. Key features
of the counterrevolution have been: (1) the gradual and still incomplete,
but ongoing removal of the welfare state protections of the underlying
population, starting with the weakest and most vulnerable (welfare
mothers) and then moving toward those of the middle class; (2) deregulation
of business and privatization of formerly public assets; (3) termination
of protection of the rights to form and maintain labor unions and/or
policies actively weakening labor organizations; (4) the absence
of any constraint on—and even active encouragement of—outsourcing
and foreign investment; and (5) the entering into international
agreements that protect corporate rights at the expense of national
sovereignty and democratic control. The counterrevolution thus entails
a reduction in the role of government in the economy, with the main
and massive exception of the military establishment, which is a
joint venture of government and private business that serves larger
functions: subsidizing business technology, stimulating economic
activity (“military Keynesianism”), and assuring “law
and order” at home and the advancement of the counterrevolution
and empire abroad. 

The word commonly used to describe supporters of the counterrevolution
is “conservative.” But this is a gross misnomer, as these
officials, politicians, corporate executives and owners, activists,
journalists, and intellectuals are clearly not trying to “conserve”
anything, but instead are in the business of dismantling existing
institutions and relationships and replacing them with others, in
accord with specific interests and ideologies. The proper word is
“reactionary,” not conservative. This even applies to
purported “liberals,” like Bill Clinton and, say, Larry
Summers. Clinton took major steps in dismantlement during his terms
of office, supporting the Personal Responsibility Act (bearing on
item 1 above), financial deregulation (2), and NAFTA and the WTO
(4 and 5). He did little or nothing to slow up the weakening of
labor organization (3). Summers was a major player in the passage
of NAFTA and in the important financial deregulatory actions in
the Clinton era (see Jeff Faux’s

The Global Class War


Contrary to right-wing ideology the managers and supporters of the
counterrevolution are not in favor of a small and inactive government
(as shown in Dean Baker’s

The Conservative Nanny State

The counterrevolutionaries want to shrink the government only in
its civil functions that serve ordinary citizens. They favor a very
large military establishment and police force although “conservatives”
implicitly define “government,” which they have made into
an invidious word, as exclusive of these favored segments of government.
They also favor a government that is very active in pursuing the
“national interest” (i.e., corporate interest) at home
and abroad and that sits heavily on the underlying population at
home to keep them quiet and to manage their personal behavior. This
increased internal activity and associated growth of “security”
(i.e., pacification) forces moves in parallel with the progress
of the counterrevolution, as the damaged general population eventually
reacts and must be controlled to permit the counterrevolutionary
process to advance. In Grover Norquist’s oftcited desire to
shrink government to a size where it can be “drowned in a bathtub,”
he was surely not speaking of the military and police—they
will be needed to pacify the victims of his counterrevolution at
home and abroad. The federal government’s size relative to
the GDP did not fall in the Reagan years and has climbed during
the Bush-2 era, with the growth in the “defense” (i.e.,
offense) budget offsetting cuts elsewhere in both cases. The counterrevolutionaries
are for both big and repressive government—they are “statist

As stressed in Mike Davis’s

Planet of Slums

, a very
important feature of the neoliberal counterrevolution has been the
rapid growth and comprehensive neglect of a huge mass of marginalized
people who have been driven off the land or out of handicraft and
industrial employment by subsidized imports, technological change,
and shriveled help to small locals under IMF and World Bank Structural
Adjustment Programs. Davis cites a 2002 CIA estimate that possibly
a billion workers, representing one-third of the world’s labor
force, are unemployed or underemployed and he describes in painful
detail the growing slums of the world where this surplus and uncared
for population suffers increasingly grim conditions and still grows
at the rate of 25 million a year. For the counter-revo lutionaries
these people are “unpeople”—no nontokenistic programs
are designed to deal with their needs and they present mainly a
problem of aesthetics (getting them out of sight) and a potential
security threat. This reinforces the governing class’s support
of a powerful security apparatus. 

Projecting Power 


he counterrevolution’s
forward policy abroad has the merit, to its proponents, of providing
a moral environment in which an anti-populist agenda can be pushed
at home as well as overseas. Fear of an external demon is stirred
up, patriotism is aroused, and the media and populace are led to
focus on the triumphs and tragedies of the armed forces wreaking
havoc in distant, but “threatening” (i.e., target) countries.
Under this protective cover opponents of the counterrevolution can
be attacked as subversive and traitorous, and the super-patriotic
(but almost universally chicken-hawk) counter-revolutionaries can
consolidate their political power and quietly carry out their internal
economic program. Of course, if the external efforts bog down and
the costs bulk large enough, the counterrevolution may run into
problems and even crises, as has been the case with the Iraq invasion-occupation.
How this will affect the counterrevolutionary process remains to
be seen. 

An important feature of “projecting power” (i.e., imperialism)
has always been the skewed distribution of costs and benefits. The
costs have always been borne by the general citizenry (including
the dead and injured military personnel and their families), while
the benefits accrue to military contractors and privileged elite
sectors who can plunder the victim countries during and after the
invasion-occupation (if successful). (For evidence as regards European
colonialism, see Grover Clark’s

The Balance Sheets of Imperialism

The benefits can be exceptionally large, because under the conditions
of war standards are more lax than usual in the confusion and need
for expedited service and under the cover of patriotic ardor, so
that markups and literal looting can be higher and more brazen than
under normal peacetime conditions. The follow-up plundering can
also be immense, with contracts written with the newly installed
puppet governments that treat the invading carpetbaggers with great
generosity. This means that while the costs to the invader’s
community may be very large, so may be the benefits to important
invader elites who therefore have incentives to encourage imperial
ventures and who also derive from it surpluses that they can use
to support politicians who will engage in “forward” policies,
as well as media and intellectuals who will put such policies in
a good light. 

Iraq invasion-occupation has provided a model case of very large
costs to the invader’s society, along with exceptional benefits
to special interests closely linked to the war-making elite and
to the governing elite more broadly (possibly helping keep the Democrats
quiescent). As has been occasionally noted, president George W.
Bush’s first economic adviser, Lawrence Lindsey, was fired
for suggesting that the costs of an Iraq war might reach $200 billion,
but now the estimates are running up to $2 trillion. This has neither
stopped the war nor led the Democrats to press for exit, despite
the majority of the public now favoring a short terminal date. Displaying
the priorities of the governing class, as Martin Wolf has noted,
even a minimum budgetary Iraq war cost of $1.2 trillion “is
10 times the world’s annual official development assistance
to all developing countries.” 

But the Iraq war has been a bonanza to military contractors, security
firms, and local collaborators, a “capitalist paradise”
for transnationals, including oil companies, and with still larger
payoffs to come if a proper pacification outcome can yet be arranged
in the devastated country. With weapons procurement and Pentagon
subsidized research on weapons now running at almost $150 billion
a year, Lockheed Martin, General Dynamics, Raytheon, Boeing, Northrop
Grumman, Honeywell, the Carlyle Group, Computer Sciences, GE, United
Technologies, and many others are raking in big profits and have
huge backlogs of orders. In the chaos, and with conflict-of-interest
built-in and auditing and financial controls feeble, overcharging
is massive and vast quantities of government property have disappeared,
essentially without complaint. 

 In January 2005 the Special Inspector General for Iraqi Reconstruction,
Stewart W. Bowen, Jr., reported that an estimated $8.8 billion from
the U.S.-controlled Development Fund for Iraq (DFI) was missing
and unaccounted for. Under the terms of the UN resolution creating
the DFI, these funds were “to be used in a transparent manner
to meet the humanitarian needs of the Iraqi people…” On
June 21, 2005 Representative Henry Waxman, submitting a report on
“Rebuilding Iraq: U.S. Mismanagement of Iraqi Funds,”
pointed out that U.S. authorities withdrew from the DFI account
at the Federal Reserve Bank of New York nearly $12 billion in cash,
the largest cash withdrawal in history, including over 107 million
$100 bills. In late June 2004, in the last week of its existence,
the U.S.-dominated Coalition Provisional Authority ordered more
than $4 billion in cash for urgent delivery, including the largest
one-day transfer of cash in Fed history ($2.4 billion). No accounting
firm, and apparently nobody else, monitored the rapid disbursement
of these huge sums, doled out in duffel bags or passed out to favored
parties from trucks, with very large sums simply vanishing. U.S.
officials have not been able to account for billions of dollars. 

massive transfers and unaccounted-for disbursements represent looting
of historic dimensions, but the UN has been silent on this gross violation
of the terms of its instruction on the use of the DFI. The U.S. mainstream
media, which had been so indignant at kickbacks in the Iraq food-for-oil
scandal—which, although comparatively modest could be (misleadingly)
blamed on the UN, were almost entirely silent on this massive plundering
(which could only be blamed on the U.S. occupiers). But imagine the
media’s attention and indignation if even a half million rather
than 107 million $100 bills were secretly distributed to needy poor
people in the United States. 

Plutocratic Base 


learly, the fact that such
policies can take hold, which involve huge net losses to the general
population and gains to only a tiny elite, with much of the gains
based on fraud and theft, shows that democracy is not working very
well in the United States. Behind the procedural forms of democracy
is a plutocracy in which a small elite has been able to drag its
country into serial aggressions by an abuse of power reminiscent
of the operations of a full-fledged totalitarian state. As noted,
the cultivation of fear and patriotic ardor by demonization is standard
operating procedure. This has worked well, although the increasing
numbers that have opposed imperialist ventures even before their
commencement has presented a growing problem. Thus far the solution
has been to go to war anyway and then depend on war ardor and “supporting
our boys” to reconcile the public to the attack. 

This has worked in part because the Democratic Party has failed
to present the slightest opposition to imperial ventures even when
based on contrived and false claims and involving gross violations
of international law. The Democratic Party is more clearly than
ever an only slightly watered-down party of business, a financial
hostage to business and the pro-Israel lobby, unable and/or unwilling
to serve its mass constituency. It speaks for the “governing
class,” not the general citizenry, which has no effective political
representation. Thus, if the governing class consensus is that we
need a gigantic military establishment and a forward policy projecting
power globally with the help of that military establishment, this
is the view of the mainstream media and the Democrats support this,
even if with a somewhat lighter touch. So do many leading liberal
intellectuals who want the Democrats to show that they are not weak
on “national defense” by more vigorous assertions of patriotism
and by using the military establishment—whose immense size
they take as a given—to pursue “real” democratization

In short, the system works in providing outstanding service to the
governing class and its corporate constituency. By the same token,
it does badly by the majority of its citizens, who are “managed”
into approving or at least tolerating imperial ventures in which
that general citizenry pays enormous costs, but with any benefits
flowing only to members, associates, and followers of the governing
class. This is structured injustice, but the most important component
of the injustice resulting from these imperial projects falls on
the heads of the citizens of the target states whose deaths and
agony may be “worth it” to Madeleine Albright, George
W. Bush, Condoleeza Rice, and Tony Blair (et al.), but which involve
first class criminality deserving of Nuremberg-like trials. 

Can the Counterrevolution Be Stopped and Reversed? 


he counterrevolution is running
into difficulties now, with Iraq unpacified and draining the resources
of the aggressor state, making its previously “willing executioners”
restive; Katrina and the corruption scandals opened many eyes to
the quality of the Bush administration; with the world’s population
increasingly hostile to the course of U.S. power projection; and
with foci of political resistance emerging in Latin America and
elsewhere. As noted, however, resistance at home is badly stymied
by the failure of the Democrats to offer an alternative and the
inability of the larger society to produce a politically meaningful
opposition and program. Furthermore, the power of the counterrevolutionary
forces is very great and there is the real possibility that in the
face of sufficient trouble and threatened defeat they might embark
on even more violent imperial enterprises and take on the role of
Samson in the Temple (consistent with “end-times” thought
prevalent among many of the supporters and some leaders of the ruling
quasi-theocratic Administration). 

We can only hope—and work for—more positive outcomes,
taking some consolation from the unpredictability of human affairs,
the surprise in the growth of political opposition in Latin America,
and the possibility that dissatisfied voters will dislodge and replace
the DNC Democrats and at least slow down or perhaps even halt and
reverse the counterrevolutionary juggernaut.

S. Herman is an economist, media critic, and author of numerous articles
and books.