You Can’t Export McWorld and
Call It Democracy
If globalization is ruled merely by the laws of the market applied to suit the powerful, the consequences cannot but be negative.
—Pope John Paul II1
Global Capitalism does not necessarily bring progress and prosperity to the periphery. . . . Foreign capital. . . . is also a potent source of bribery and corruption.
—George Soros2
The impulse to nurture the growth of democracy is crucial to preventive democracy understood as a national security policy, but nurturing democracy is often confounded with the impulse to export capitalism and cultivate global markets. Many people believed that in the countries that emerged from the long night of Soviet communism, dawn was signaled by the rise of free trade and privatization of capital. In the Clinton no less than the Reagan administration, the term market democracy was used to suggest that democracy is synonymous with the free market, as if a “cold shower” approach to economics involving the abrupt privatization of power and wealth could wash away the sins of the command economy. Communism’s totalitarian perversion of the concept of public goods seemed to have made the very idea of the public guilty by association.
Confusing democratization with economic liberalization is to confound the spread of liberty with the spread of McWorld—that seductive compound of American commercialism, American consumerism, and American brands that I have elsewhere argued has dominated the globalization process. When the ethos of Disney becomes synonymous with the ethics of liberty and when consumers come to be seen as identical with citizens, genuine democratization is derailed. Yet this understanding of democratization as marketization goes to the heart of America’s postwar nation-building strategy in places like Afghanistan and Iraq. The leading premise is that free markets will breed free women and men, that markets and democracy are pretty much the same thing. Even thoughtful critics of marketization can confuse the building of civic democracy with the spread of markets. In an otherwise persuasive critique of how exporting free markets “breeds ethnic hatred and global instability,” Yale Law School professor Amy Chua argues that “the global spread of markets and democracy is a principal, aggravating cause of group hatred and ethnic violence,” adding that it is not just the market but democracy itself that is seen as “a panacea.”3 Fareed Zakaria shares a simplistic and unfriendly view of democracy as nothing but elections, but as a friend to markets warns that the real threat comes from democratic theorists who are today “mostly radicals in favor of total, unfettered democracy.”4 For Zakaria, unlike Chua, liberal markets do not exacerbate the perils of democracy but ameliorate them. Neoliberalism is not the problem but the solution. “What we need in politics today,” he writes—arriving at Chua’s conclusion from an opposite direction—“is not more democracy but less.”5
Given how often American administrations have merged “market” and “democracy” into a single phrase, and given Zakaria’s conviction that neoliberal free trade and marketization can alone save democracy from itself, it is not surprising that critics of democracy abroad cannot see the difference between aggressive capitalism and aggressive democracy. But like Amy Chua, such critics risk throwing out freedom’s baby while trying to dispose of its economic bathwater. Just how separable market forces and democratization can be is evident from the Bush administration’s plans for postwar Iraq. Even before war’s onset, the government had invited major private sector American corporations to bid on reconstruction contracts. Critical attention focused on the apparent connections between some members of the administration and the corporations involved (Halliburton, for example), but less attention was paid to the more important fact that reconstruction was being both privatized and Americanized—international NGOs and public institutions being nearly invisible in President Bush’s postwar plans, which initially called for a military/civilian administrator (Jay Garner, the head of the Pentagon’s new Office of Reconstruction and Humanitarian Assistance, but a former general) under the overall direction of Central Command Commander General Tommy R. Franks but gave way to a civilian, Lewis Palmer Bremer III, who seemed much more militant. This is civilian control with a difference.
Chua may be right in thinking that markets have swallowed up democracy on the global plane today, but democracy was once capitalism’s cage. The historical symmetry that paired democracy and capitalism within societies and made the democratic nation-state the free market’s most effective regulator, humanizer, and overseer has gone missing. The marketplace has been globalized willy-nilly, because markets can bleed through porous national boundaries and are not any more constrained by the logic of sovereignty than are SARS, crime, or terrorism. Yet democracy remains trapped inside the nation-state box, leaving global capital utterly unchecked. Today America is not in the business of exporting free market democracy, it is in the business of freeing up markets and globalizing corporate capital and calling it democracy.
The history of capitalism and free markets has long been one of synergy with democratic institutions. But synergy is not identity. Free economies have grown up within and been fostered, constrained, and regulated by democratic states. Democracy has been a precondition for free markets, not the other way round. As representation and suffrage were extended, entrepreneurial capitalism grew up alongside them. Only in the nineteenth century, well after the unwritten British constitution had evolved in clearly democratic directions, did mass industrial capitalism and free trade become hallmarks of the British economy and the British Empire. The freedom of the market that has helped sustain freedom in politics and a spirit of competition in the political domain has itself been historically conditioned by democratic institutions. In the United States, industrial capitalism took off only after the Civil War, when the franchise was extended to universal manhood suffrage. Contract law and regulation as well as civic cooperation and local civic institutions have attenuated capitalism’s Darwinist face and contained its tendencies to monopoly, inequality, and other self-destructive contradictions. The gilded age of robber barons ended only when Teddy Roosevelt, Woodrow Wilson, and later Franklin Delano Roosevelt brought the free enterprise system under the regulatory surveillance of the democratic state—not destroying but saving capitalism from its contradictions. In the international sector, the age of robber barons—call them robber banks and outlaw speculators—has returned. For the radically asymmetrical character of globalization has allowed capitalism to leap out of the box defined by nation-state democracy, fostering predatory practices and global anarchy, while leaving democratic institutions behind. It is argued that globalization civilizes and democratizes international relations, but rather it has brutalized them, impelling Pope John Paul II to warn against globalization ruled by the laws of the market and applied to suit the powerful. The neoliberal ideology of privatization that has dominated political thinking in the last several decades and that has been the unspoken context for the American approach to “democratizing” the globe, has in fact had a corrosive effect on democratic governance. In contrast to the religious fundamentalists who fuel terrorism and confront capitalism with destruction, market fundamentalists have made common cause with democracy. Yet market fundamentalism has done little for democracy. It disdains democratic regulation with dogmatic conviction and is as enamored in its own way of global anarchy as the criminal syndicates and terrorist rings it opposes.
The neoliberal orthodoxy believes that markets can do pretty much everything free women and men need done, while government can’t do much of anything. From this perspective, democratization’s aim ought to be to weaken rather than strengthen state institutions and undermine rather than secure the idea of public goods. Since many societies just emerging from the hold of communist or fundamentalist ideologies have experienced the state only as an exercise in tyranny, this antistate market ideology is not hard to sell. The critique of big government and state bureaucracy quickly becomes a critique of democracy itself. “We the People” morphs into “It the Terrible,” and what is supposed to be the march of democracy begins to look like the dismantling not just of the command economy but of popular sovereignty itself. The attack on “big government” turns into an attack on democratic governance.
Privatization ideology softens people up to accommodate the rule of markets. It encourages them to welcome financial capital as a servant of financial capitalists and forget its role as a servant of democratic peoples and their interests. It reverses the traditional logic of social contract thinking on which America was founded and on which an international order must be founded as well. Rather than privilege the power of a common will and public goods over the anarchy of private power, it celebrates private power unencumbered by law, regulation, or government. It insists that freedom is secured not through cultivating justice and the law but by assuring their absence. It denies vehemently the traditional wisdom behind America’s historical devotion to multilateralism and international institution building. Thus, it ignores “the secret of the United States’ long brilliant run as the world’s leading state,” described by G. John Ikenberry as “its ability and willingness to exercise power within alliances and multinational frameworks, which made its power and agenda more acceptable to allies and other key states around the world.”6
Instead, the logic of privatization in the realm of international relations dictates “a general depreciation of international rules, treaties, and security partnerships.” Unilateralism is in fact privatization applied to global affairs. Privatizers prefer bilateralism to multilateralism—the best deals involve only two parties. But they prefer unilateralism to either, where there is finally only one party to every contract, the party of power. As Joseph E. Stiglitz wrote of the International Monetary Fund’s (IMF’s) bilateral practices: “In theory the IMF supports democratic institutions in the nations it assists. In practice, it undermines the democratic process by imposing policies. Officially, of course, the IMF doesn’t ‘impose’ anything. It ‘negotiates’ the conditions for receiving aid. But all the power in the negotiation is on one side.”7
Whether or not, as Ikenberry worries, “unchecked U.S. power, shorn of legitimacy and disentangled from the postwar norms and institutions of the international order, will usher in a more hostile international system, making it far harder to achieve American interests,” raw power is unlikely to foster democracy. For the insistence that freedom is marked not by the presence of accountable, transparent democratic government but by the absence of all government—of all restraints on markets—effectively equates freedom with anarchy. Since anarchy is also the lawless environment preferred by criminals and terrorists, neoliberals end up as inadvertent partners in crime with their most insidious adversaries. Privatization puts the public sector on the defensive, both within states and in the ethos that governs relations among them.
Privatization does the ideological work of global market economics inside nation-states, privileging the private interests of corporations and banks and delegitimizing the common goods of the community. National government now becomes an instructed instrument of the private sector rather than participatory assembly of the public sector. In this guise, government is made over into a useful tool of global firms, banks, and markets in such international organizations as the World Trade Organization and the International Monetary Fund—nominally democratic political organizations constituted by sovereign states, but in effect servants of global economic interests that undermine both national sovereignty and democracy. Privatization does not decentralize power; it is not devolution. Rather, it shifts power deployed from the top down that is public, accountable, and transparent to the private sector, where it remains top-down but is now unaccountable and opaque. Privatization effectively gives public power away, yielding it to private elites beyond scrutiny and control. In the name of liberty, it destroys democracy by annihilating the good of the public (the res publica) in whose name democratic republics are constituted in the first place.
Under conditions of privatization, citizens do not approach closer to power but are further distanced from it. Something like this happened in Russia after 1989, when power was wrested from the hands of corrupt and (at best) only quasi-legitimate public authorities and put into the hands of private proprietors who were even more corrupt and were wholly illegitimate. To empower private hierarchical bureaucracies in place of inefficient or bungling public bureaucracies may be a victory for instrumental efficiency but it is not a victory for democracy. When President Clinton proclaimed in 1996 that America had reached the “end of the era of big government,” he was unfortunately not so much liberating Americans from public bureaucracy and political corruption as introducing them to the new Enron era of private bureaucracy and corporate corruption. In doing so, he inadvertently helped turn the overt market-fundamentalist war on public inefficiency into a covert war on democracy itself.
The consumerist argument contends that marketizing politics actually enhances choice by permitting individuals to participate by voting, not their conscience or their public values but their dollars and euros and yen. The free market supposedly represents a market democracy of individuals who manifest their preferences and express their choices through their spending habits. If choice is the essence of democracy, consumers busy shopping their preferences are surely model citizens. Indeed, by globalizing shopping and consumption, global markets create global citizens where there were none before.
The consumerist understanding of democracy suffers from two fatal errors: it misunderstands what a voluntary choice is, and it misunderstands what the critical difference is between public and private choosing. To be free, voluntary choices must be unconstrained. Without succumbing to the false claims of “false consciousness” (where it is denied that ordinary people know what they are doing when they make consumer choices), one can recognize that how people spend dollars or euros is not always quite as free as it may feel. “Save us from what we want!” reads the postmodern age’s best-known secular prayer. The psychology of wants and needs in an era of pervasive consumption surely calls into doubt the term voluntary. Freely made choices are subject to marketing, merchandizing, advertising, and packaging influences, all of which (as the billions spent in these sectors suggest) are intended to shape, modify, divert, and even compel choice in the direction of what producers need to sell rather than of what consumers need to buy. In the run-up to the Iraq war, American consumers spent large sums on duct tape, plastic sheeting, bottled water, flashlights, and even gas masks on the recommendation of the Department of Home Security. Did their spending represent “voluntary” consumption or something else?
Traditional capitalism once manufactured goods to meet the felt needs of ordinary people; postmodern capitalism appears more often to manufacture needs to assure the sale of a surfeit of goods for which there may be no need at all among ordinary people. The “need” for duct tape rested entirely on (dubious) government claims that Americans might protect themselves against chemical and biological warfare by sealing up their windows (a position Homeland Security quickly renounced). The need for DVD burners, SUVs, boutique bottled waters, or Hula Hoops is far more problematic. Much of what is for sale in the consumer economy addresses needs created by the producers and little else. Even consumer capitalism’s least skeptical celebrants may admit that the billions spent on marketing to children from one to six years old points to something other than pure market freedom and pristine consumer choice.
Even were it to be shown that consumer choosing was always genuinely free and a reflection exclusively or what people “really” want and need, consumer choice remains necessarily a matter of private choice. These private decisions, autonomous or not, cannot affect public outcomes and are not appropriate surrogates for public choices. Democratic governance is not simply about private choice; it is about public choosing: about dealing with the public and social consequences of private choices and behavior.
It is as citizens that consumers and private choosers deal with the public consequences of what they do as private persons. Even classical free market philosophers like Milton Friedman allude to the “neighborhood effects” of private actions that private action itself may not be able to address—environmental pollution, for example.8 The distinction between private choosing and its social impact is the essence of citizenship, and is intuitively grasped by citizens. Many Americans genuinely want sport utility vehicles, and a number probably believe they need them for reasons (however spurious) of safety, off-road capability, cargo space, and so forth. Yet it is completely rational for an avid SUV fan to want a Humvee as a consumer but as a citizen to make it extremely expensive and/or difficult for anyone (himself as a consumer included) to buy and operate one. As a citizen, a person reckons with the social and public implications of what she does as a consumer. The consumer says, “I feel safer in an SUV.” The citizen says, “You may feel that way, but safety data shows you’re not, and it certainly proves people in other smaller vehicles are endangered, so we are going to regulate SUVs, make their bumpers conform to uniform standards.” The consumer says, “I love that V-8 power surge!” The citizen says, “Yeah, but we need to reduce our dependence on foreign oil, on countries like Iraq and Saudi Arabia, and we need to do more to stop emissions that cause global warming, so we are going to improve gas mileage, treat these suckers as passenger vehicles not light trucks, insist they meet higher emission standards.”
This may sound like schizophrenia, but it is simply the difference between consumers and citizens: the consumer within an individual person and the citizen within that person. It is the difference between “me” thinking and “we” thinking, and hence the difference between private thinking and public thinking, between consumer and civic logic. Democracy’s virtue is that it insists on the priority of the we over the me, of civic over consumer logic. The exact balance is the task of democratic politics itself, but no balancing can occur unless the difference between the two is grasped.
The globalization of markets and of the consumer mentality has meant that global reasoning is dominated by private consumerist logic rather than public civic logic. In addressing mobile financial capital, for example, the relevant question according to consumer logic becomes how to protect the investor rather than how to protect the public goods his investment feigns to enhance but in practice often damages. A market-biased system of the kind that defines globalization today will sacrifice the common welfare needs of an entire people in the name of forcing governments to promote budgetary “discipline” so that speculative capital is secured. Rather than relying on high returns to repay those who engage in high-risk investment, investors insist on high returns but low risks that are in effect secured by forcing governments to take the real risks. Modern global capitalism thereby manages to privatize profit while socializing risk.
Neoliberal ideology argues that regulations that protect common needs encroach unfairly on the liberty necessary to the free flow of capital, labor, and goods. Much the same thing was said about the introduction of unions in the late nineteenth century, when organizing labor around its common interests was seen as an infringement both of the liberty of producers to hire workers at free market wages and of the “right to work” of laborers free to accept a given wage or refuse the job.
The marketplace, local and global, offers a perfect venue for the expression of economic preferences and for the arbitration of relations between producers and consumers. But even when its workings are not skewed by unevenly distributed power and the pressures of monopoly, even when merchandizing and marketing do not pervert the meaning of needs and wants, the market cannot secure public goods or outcomes conducive to the general welfare. Free market fundamentalists claimed the public interest would be forged from a magical intersection of private wills—manipulated by what Adam Smith called the “invisible hand”—but this was never more than a dream, an unconvincing rationalization for privileging those who actually benefited from private market exchanges.
Democracy is the mechanism by which private power and personal desires are accommodated to public goods and the common weal. Aggregating private interests will not do this job because power too gets aggregated, along with interests, resulting in skewed and unfair outcomes. But market theory is oblivious to power. It assumes equality and relatively perfect competition. Yet power is the essence of human relations and stalks every “voluntary” choice and every “freely made” contract. The public good is not simply the sum of private goods but the equalization of power according to rules of fairness and justice, something markets simply cannot achieve.
The most dangerous forms of tyranny are those that are advanced under the banner of freedom. Hence Pope John Paul II’s trenchant warning that “the human race is facing forms of slavery which are new and more subtle than those of the past, and for too many people, freedom remains a word without meaning.”9 To take but one egregious example, when freedom is associated with the privatization of goods as obviously public as the human genome, the pope’s fears are vindicated. Freedom must mean something more than corporate profit and consumer choice.
In Federalist Number 63, the prescient James Madison wrote that “liberty may be endangered by the abuses of liberty, as well as by the abuses of power . . . and the former rather than the latter is apparently most to be apprehended by the United States.” Nowhere today are the abuses of liberty more evident than in the made-in-America global market sector, where in the good name of liberty monopoly, greed, narcissism, and anarchy have been set loose; and where global private capital, consumer narcissism, and rampant commercialism pass as harbingers of global democracy.
Owls hope that what happens after wars of “liberation” is as important as what happens during them. The Bush administration is publicly committed to democratization. But to think that exporting McWorld and globalizing markets is tantamount to forging free societies and a democratic world is a dangerous misconception likely to undermine prospective nation-building strategies. To democratize nations emerging from despotism and to endow an anarchic global disorder with an infrastructure of public law and civic cooperation cannot be simply to export capitalism. Luxus Americana cannot be confounded with lex humana. Preventive democracy must look elsewhere for recipes that will end terrorism and promote both safety and freedom.