23 Governing (under) capitalism

23.1 Seven Rules for Running a Real Left-wing Government

Welsh

I have been asked how to stop right-wing reversals.

First, it’s worth noting that these three cases are somewhat different. Brazil is a coup in all but name. Venezuela saw massive, deliberate economic sabotage by internal right-wing forces. The situation in Argentina was the closest to fair; a reversal of electoral fortunes.

Still, there are lessons to be learned from their experiences:

It’s Not You, It’s China (or, the World System)

All three left-wing movements in Brazil, Venezuela, and Argentina were associated with rising commodity prices. When those commodity prices collapsed, it was only natural for their fortunes to reverse. They are in power when the economy goes bad, now people want them out. The populace is willing to be complicit in actions that get them out, which are dubious.

23.1.1 Don’t Run Your Economy on Resources

Yes, okay, this is easier said than done. It is hard to bootstrap into something else if you’re a non-core economy. Heck, even many core economies are losing their manufacturing bases and while finance can “work,” it’s a shit way to run your economy. So are “services.” We’ll discuss this in more depth below. But the bottom line is this: You have to develop (or have plans to develop) your economy into a mixed economy, so that it can survive during the inevitable downturns, and, thus, so that your movement can survive them.

People expect you to be able to maintain prosperity. Given the world order as it stands, that may be like asking you to swim with a hundred pound weight strapped to your back, but you still have to do it.

23.1.2 Your First Act Must Be a Media Law

Break them up. Take them over. Whichever. Ignore the screams about media freedom from the usual suspects in the West, this is a case of “freedom of the press belongs to those who own one.” In all three countries, the media conglomerates remained in the control of oligarchs (update: to be clear, Venezuela did eventually expropriate them, but only after many years), and in all three cases, the majority of the media remained relentlessly hostile to the left.

This is just as true in countries like Britain, Canada, or the US as it is in Argentina, Venezuela, or Brazil, by the way. There is a reason why the post-war liberal regimes put strict media controls in place–including size limits–and there is a reason why those limits were removed by the neoliberal regimes that replaced them.

You can win “against the media” for a time, but if you leave it in the hands of your enemies, they will eventually use it to bury you.

23.1.3 Take Control of the Banking Sector

The banking sector creates money. Money determines what people can and cannot do. This is the control mechanism for the economy in any state which runs on markets. You must control it. If you control it, you can use it to strangle your domestic enemies. If you do not, your enemies will use it to strangle you.

This is a great problem. The world economy has been designed so that countries need to trade, and they need foreign money. So, you can take control of your banking sector, but you can’t control England’s, or America’s, or the payment system (this is what killed Argentina), and thus you cannot tell creditors to go fuck themselves. You need foreign money for necessities.

It is also problematic because the people who know how to run the market economy are not your people. You have get rid of the people who ran it before, so who is going to run it now?

23.1.4 Who Is Your Administrative Class?

You must have a class of people available to run the state and those chunks of the economy over which you are taking control (whether formally or informally). You must know who those people are. FDR reached into academia for many of his people; he also pulled from the social gospel folks (who were used to administering large organizations), and he found a lot of fellow class traitors (for example, JFK’s father, whom he used to run the SEC–Kennedy knew all the tricks and was able to tamp down Wall Street’s BS).

Post-FDR, one of the reasons why factory line supervisors were made ineligible for union membership was so that union members couldn’t be used as easily to take over organizations–even the lowest level supervisors were no longer union members.

There are always people who know the business and believe the way it is being run is bullshit. But you have to know who they are, both as a class and individually. There are certainly people who can run TV stations and newspapers who are left-wing, but you’ve got to know who they are. There are heterodox economists and people who have worked in the finance industry who are class traitors and just itching for a chance to put the boots to the assholes they worked for. Again, you must know who they are.

23.1.5 Take Control of Distribution and Utilities

Yeah, sorry, but no one said this would be easy. In Venezuela, you had the economic elite deliberately exacerbating shortages. Huge stocks of consumer goods buried and hidden.

These people have power. They are your enemies. They will use their power against you. They will not “play fair.”

In Egypt, under the Brotherhood, the deep state did things like cause electricity outages and blame it on the Brotherhood. Of course, the same bureaucrats as always were running the electrical system.

Again, this comes back to control: You have to take control and you have to have competent people you can trust who can help you. Do you know who they are?

23.1.6 Reduce Your Vulnerability to the World Trade System

The world system as it stands now is designed so that no nation can stand alone: No one can make and grow everything they need. This was not always the case. In the past, many nations went out of their way to be self-sufficient. It was Keynes’ position, by the way, that nations should produce all their day-to-day necessities themselves, wherever possible, and import only what they could not produce and luxuries–but to strive not to need anything they couldn’t make.

This has been economic and political orthodoxy at various points.

But it isn’t now. You’re in hock to various foreigners for a lot of money, denominated in their currency. You probably can’t feed your own nation. You can’t make what you need (toilet paper, famously, in Venezuela’s case) and you can’t buy it without foreign currency. But the foreign financial system is not friendly to you if you’re genuinely left-wing, and the world trade system is set up to make it illegal to do what is required to produce goods domestically.

You’ll need subsidies or tariffs to make new domestic industries viable, and that’s illegal thanks to a web of trade deals meant to make you unable to control your own economy.

Venezuela tried to increase farming, but failed, precisely because the price of oil went through the roof, and foreign food was cheaper than domestic. The classic response would be tariffs, but the kinds of tariffs sufficient to work would not be tolerated by the world trade system.

It’s hard to overstate how huge a problem this is. It goes back to the commodity issue. Maybe you have enough foreign cash for now, but you won’t always, and you must have it. This vulnerability must be reduced, generally.

No one has managed this in the neoliberal era, not completely, and huge amounts of geopolitics are run based on this. Russia has its oil prices drop, so it moves to selling military goods to make up the difference, for example, and its Syrian intervention is, in large part, a venue to show off how well its weapons work.

Workarounds have been tried: Cooperation with other left-wing nations is the standard one. Venezuela with Cuba, and so on. But this is the “south” trading with the “south.” The stuff they really need, generally, none of them actually produce. If they do, they either don’t produce enough, or they don’t really, i.e. it’s produced by some multinational with no loyalty.

So then you try to appropriate the multinational, but that runs you into all sorts of problems from getting replacement parts for the machines, to the experts to run what you’ve expropriated, to effective embargoes (even if not declared as such).

Nonetheless, this is a problem which must be solved. A full description of how to bootstrap an economy is beyond the scope of this article, and I’m not sure I have a full kit, but I will say this: There are a huge number of highly-skilled first world workers, from the Ph.D.-level down to machinists who are unemployed or underemployed. They want to work. They hate their own system. You can bring these people in, give them new lives, and at least have the necessary expertise.

I know many extremely qualified pharma professionals who would love a chance to set generic factories and create new drugs without the pressure for palliatives they receive from their drug company employers (or ex-employers), as just one example.

This bootstrapping is a challenge which appeals to a lot of the very best and brightest.

23.1.7 Be Satisfied with What You Can Grow and Make

If your elites or population insist on fresh summer vegetables in winter, you’re done. What you can produce, you must have a taste for. This is especially true for elites. If they must have the latest Mercedes, a vacation in Paris, and a home in London, you’re screwed because to have those things, they must have foreign currency.

When Korea was industrializing they had huge campaigns to not smoke foreign cigarettes: It was considered unpatriotic.

You need what foreign currency you have to stay earmarked for capital goods, and you need your elites to be local elites, not global elites. If your elites consider themselves global, you will never be able to create the necessary self-sufficiency to buck the world system.

23.1.8 Obey the Laws of Purges

Let’s not dance around. Your first step will be to break the power of the current economic and political elites who are not willing to convincingly join you–or, at least, let you rule without trying to sabotage you.

You must do this all at once. When it happens, it has to happen to everyone to whom it is going to happen. This is Machiavelli’s dictum, and he was right. After it has happened, those who weren’t broken know they’re safe as long as they don’t get in your way.

If the breaking keeps going on and on, everyone who still has something to lose (and still, thus, has power) lives in fear. They must destroy you before you destroy them.

Let’s give a concrete example. Assume Obama was really a left-winger. He gets into power in 2009, and he really wants to change things. He needs to take out the financial elite: Wall Street and the big banks.

They’ve handed him the opportunity. Here’s part of how he does it: He declares all the banks involved in the sub-prime fraud racket (all of the big ones and most of the small ones) conspiracies under RICO.

He then says that all the individual executives’ money are proceeds derived from crime and confiscates it. (This is 100 percent legal under laws as they exist). He charges them, and they are forced to use public defenders.

They are now powerless. This is the second law of purges: Anyone you damage, you must destroy utterly. If you take away half their power, and leave them half, they will hate you forever and use their remaining power to destroy you.

Leave them whole, or destroy them. The financial executives would have been destroyed, and win or lose in the courts, the next five to ten years of their lives would be consumed by personal legal nightmares.

Again, this is a Machiavellian dictum.

All of this will make many readers uneasy. It seems “mean.”

Get out of the game. You aren’t fit for it. This is all mean. Millions of people die every year and millions more are ruined by the current system. If you’re in this game to win it, rather than feel good about yourself, you will have to play real power politics by the actual rules of the game.

Too many left-wingers try to play by what they think the rules are. “We have a fair election every X years and the losers accept the result and don’t sabotage the winner (or start a coup).”

Those aren’t the real rules. If the right is really losing, they will cheat and cheat massively. They will think nothing of running death squads, making a deal with the US to support guerrillas, and so on.

You directly threaten their wealth and power, if you are a real left-winger. Even if all you want is a 50s style social democracy with racial and gender equality, that would destroy almost all of what they have. They remember what FDR did to them, even if you don’t. They remember all the lost power and fortunes.

It is not possible to have a fair, egalitarian, prosperous society, and have very rich and powerful elites. It cannot be done. Brandeis was exactly right when he said you can have democracy or great wealth in the hands of a few, but you can’t have both.

Either you’re willing to do what it takes, including the ugly bits, or you aren’t. There are sometimes local exceptions, places where a lot of the ugly isn’t needed, but there aren’t a lot of those places left in the world. This isn’t the post-war era and even then, in the South (as opposed to Scandinavia), actual egalitarian, developed economies mostly weren’t allowed. You can ask Central and South America about that.

Most left-wing movements get into power without having properly thought out what they’ll do once in power and without a realistic understanding of how deeply their right-wing opponents lack any belief in democratic norms.

Break your enemy’s power. If you’re any sort of left-winger worth your salt, you ethically do not believe in huge concentrations of power and money in the hands of a few people anyway. Act on your beliefs.

And if they’ve committed a pile of crimes (and they almost always have), use those crimes against them.

Then remember the world system is set up expressly to stop what you are doing.

You’re trying to tackle the dragon, and most people who do that get eaten. We tell the stories of the dragonslayers because they are so few.

So, know the odds are against you and be willing to do what is required to improve them. If you aren’t, stay home.

Welsh (2020) Seven Rules for Running a Real Left-wing Government