The myth of US democracy

Published: November 1, 2015
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The writer is vice-chancellor of the Pakistan Institute of Development Economics. He holds a PhD in Economics from Stanford University

The writer is vice-chancellor of the Pakistan Institute of Development Economics. He holds a PhD in Economics from Stanford University

The vision of a government of the people, by the people and for the people is enchanting, and powerfully attractive to masses yearning to be free. However, the title of Nobel laureate Joseph Stiglitz’s book, Of the 1%, by the 1%, and for the 1% is a far more accurate description of the reality of US democracy. Prophetically, Eisenhower had warned against the threat to democracy posed by the powerful military-industrial complex. Today the power of a tiny minority to control the US, and thence the world, exceeds his worst nightmares.

In 2010, the US Supreme Court ruled to allow corporations to spend money on political campaigns. In 2014, the Supreme Court removed certain limits from such political spending, effectively making it legal for corporations to buy elections. It is now reported that industrialist mega-donors, the Koch brothers, are planning spend close to a billion dollars to fund their favourite candidates in the 2016 elections. Of course, these changes in the law only reflect the underlying force, which is the strong increase in the power and wealth of the top one per cent since the 1980s. Stiglitz notes that 25 years ago the richest one per cent of Americans took 12 per cent of the yearly income, whereas today the share has doubled to 25 per cent. While a full description would fill a book, we provide some illustrations of the amazing laws passed against the interests of the majority. Such laws would have had no chance in a genuine democracy.

The power of the pharmaceutical lobby ensures that the cost of drugs in the US is highest in the world. Congressman Tauzin played a key role in getting the Medicare Prescription Drug Bill passed, which is a trillion dollar give-away to drug-makers. This bill prohibits the US government from negotiating lower drug prices and bans the import of cheaper, identical drugs. Two months after getting the bill passed, Tauzin resigned from Congress and got a $2 million job with the organisation, Pharmaceutical Research and Manufacturers of America. Similar sinecures were provided to several of his congressional associates who helped get the bill passed, in an unusual congressional session at 3am. While this bill stands out as the most expensive, more than 1,500 bills favoured by the pharmaceutical lobby have passed in Congress in the past decade.

The power of small lobbies to control Congress was brought home by the recent mass shooting in Oregon. President Obama openly expressed anger and frustration that despite dozens of shootings, the tiny but well-funded National Rifles Association has blocked all possible gun control laws. Even though the majority of the nation favours such laws, congressmen consider it political suicide to oppose free access to guns. A similar holy cow status is enjoyed by Israel — many politicians and journalists have been forced to issue public apologies for simply stating facts about the Israeli occupation of Palestine. In general, the majority of the US public is opposed to foreign wars like Iraq and Afghanistan, but US foreign policy is not governed by the wishes of the majority.

In a plutocracy, money rules. Banks have the most, and often speculate with depositors’ money. If they win, that’s great for them; if they lose, then someone else pays. In wake of the Great Depression, caused by such gambles, the Glass-Steagall bill prohibited speculation by banks. In 1999, the Act was repealed, and in 2000, the Commodity Futures Modernization Act removed many restrictions on banks, and created a trillion-dollar unregulated shadow banking industry. Banks took advantage of this freedom to speculate heavily, resulting in the Global Financial Crisis in 2007. In the aftermath, the majority of the public was in favour of punishing bankers, but Congress was firmly in favour of trillion-dollar bailouts at the expense of the public. Since then, banks have gone on to enjoy massive profits, while millions remain homeless, hungry and unemployed. Consider the glaring contrast with Iceland where 26 high level bankers have been jailed, while no banker in the US has even been charged with a crime. Even Donald Trump, one of the plutocrats, has acknowledged publicly that “the system was broken” and he could buy favours from politicians by contributing to their campaigns.

While many have commented on the death of democracy in the US, none are optimistic about the future prospects of the bottom 99 per cent. For us in Pakistan, as we struggle to plant the seeds of democracy, the lesson is to avoid blind imitation, and create greater genuine participation at the grass roots level. Only in this way can we avoid a concentration of power at the top that leads to elite capture of democracy. Ultimately, eternal vigilance is the price of freedom.   

Published in The Express Tribune, November 2nd, 2015.

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Reader Comments (12)

  • Iqbal
    Nov 1, 2015 - 11:18PM

    USA should learn from Pakistani democracy. Here our government is independent and no military-industrial complex can influence it even remotely.Recommend

  • Bairooni Haath
    Nov 2, 2015 - 5:28AM

    True the US has highest drug costs in the world, but that is the reason why most of the world’s pharmaceutical research takes place in the US. In balance, the US gains more than it loses. What Dr. Zaman does not understand is that to promote innovation, you have to have a system where the innovator keeps the fruits of their innovation. Also, nobody is paying for these drugs from their own pocket, health plans, Medicare, Medicaid etc. all pay. Germany, which pioneered Pharmaceutical research, does not boast a single major drug company today, a cautionary tale having politicians decide pricing.Recommend

  • Zeeshan
    Nov 2, 2015 - 5:31AM

    @Iqbal,

    It should be other way around – Pakistanis should learn how to run their democracy the way Americans do – bribery is lobbying, military is national interest, media is free. Recommend

  • vasan
    Nov 2, 2015 - 6:57AM

    Excellent.Recommend

  • Iqbal
    Nov 2, 2015 - 7:01AM

    Indeed USA is the land of opportunity, and most of the time opportunity beckons who are already rich, powerful and possess social standing. Having said that, it would be unwise and stupid to equate it with other countries, countries whose leaders are despotic, countries which are not secular, or countries which have no notion of governance. Recommend

  • Feroz
    Nov 2, 2015 - 10:34AM

    It is pretty much the same everywhere with the top 1% controlling approximately 50% of all assets. Recommend

  • Toba Alu
    Nov 2, 2015 - 12:31PM

    @Bairooni Haath:
    By global sales (2014) Novartis (Switzerland) tops the list of pharmaceuticals, Roch (Switzerland) is third, Sanofi (French) is fourth, Merck&Co (German) is fifth, Bayer (Germany) 16th. Pfizer (American) is second. AstraZeneca, GlaxoSmithKline all giants and not American. Your reasoning seems to come out of economic myth books of trickle down economics, lower taxes for the rich, government debt is bad, austerity is the solution. Your arguments lack any credibility.Recommend

  • Rex Minor
    Nov 2, 2015 - 4:21PM

    The vision of a government of the people, by the people and for the people is enchanting, and powerfully attractive to masses yearning to be free.

    The above definition is a theory Sir!! In real terms this is the most civilised manner to rule over the minorities in a land. America being the best of all examples

    Rex Minor..Recommend

  • Parvez
    Nov 2, 2015 - 10:53PM

    Is this not the case with Pakistan…….in spades.Recommend

  • Talha
    Nov 3, 2015 - 11:06AM

    Beautifully written and intellectually stimulating provided one is ready to learn.Recommend

  • Milind
    Nov 3, 2015 - 10:00PM

    @Iqbal – “USA should learn from Pakistani democracy. Here our government is independent and no military-industrial complex can influence it even remotely.”

    You have a keen sense of humour… Recommend

  • Harris
    Nov 15, 2015 - 11:15PM

    Very well written. US has turned into a plutocracy, primarily due to the inception of Reagonomics and its solidification during the Clinton regimes. The lassez-faire argument to encourage innovation is flawed because sustainability of pharmaceutical companies isn’t dependent on IPR/patents/exorbitant prices of drugs. Governments and multilateral organizations can intervene to guarantee a market for these drugs at affordable prices. Examples are interventions by UNITAID, WHO, Gates Foundation and others to make HIV and TB drugs cheaper in developing countries. Dr. Zaman’s writings are amazing and they point to the core of problems rather than a superficial rant by many others. Recommend

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