How Unregulated Finance is Killing Democracy

The twin threats of right-wing populism and unencumbered financial capitalism pose a crisis for democracy across the world, argues Robert Kuttner in his new book, Can Democracy Survive Global Capitalism?

In his new book, American Prospect magazine editor Robert Kuttner charts the rise and fall of democracy in the West since World War II. The postwar social order was characterized by a unique “harmonic convergence of forces”—including an economically-directive state, a weakened capital-owner class, and strengthened labor unions—which allowed for economic growth within democratic institutions. But, following the Western economic crisis of the 1970’s and the collapse of the Bretton Woods system, big business was able to again direct the economy as it did in the pre-war period; the difference is that this time, banking and finance have played an increasingly leading role. The anti-regulatory climate this yielded in the 1980’s and 1990’s facilitated the 2008 financial crisis, which has in turn activated right-wing, populist movements against democracy.

[JohnWilliams-channel]

Wealth disparity is behind so much economic turmoil. It really is a tragedy of the commons for the wealthy and their rent seeking behavior that they are unable to stop themselves from destroying the society in which they live.

[harryholiday]

The Lewis Powell Manifesto is almost totally implemented on the US citizen and the controlled depression is now fully in place. Total control of family finances is now complete. Appreciate your bringing it for everyone to understand. Thanks for sharing this information.

[robgoren]

Kuttner's book is the best examination of the failure of Neoliberalism I've read in many years.

[kiwikakashi]

My dude on the right is wearing a bike shirt and a suit jacket

fresh 2 death

[isatousarr]

Unregulated finance has become a powerful force that is slowly eroding the foundations of democracy, especially in low- and middle-income countries (LMICs), which have increasingly become hubs for money laundering and illicit earnings. The lack of stringent regulations allows elites both domestic and foreign to exploit financial systems, backing corrupt leaders and rogue states in exchange for the freedom to launder money and fund illegal operations. This creates a vicious cycle, where the wealthy and powerful can escape accountability, while the people bear the brunt of the consequences.

In many cases, these elites use the concept of meritocracy to further their control, manipulating electoral systems to install leaders who serve their interests, rather than the will of the people. For instance, they may support the election of a president or leader who has lost the popular vote, knowing that this person will be more compliant in carrying out dirty deals for illicit earnings. These leaders, backed by corrupt external powers, use their position to weaken democratic institutions, suppress dissent, and ultimately drain the country of its resources all while perpetuating an illusion of fairness through manipulated meritocratic processes.

The cost of this unregulated finance is devastating: it breeds inequality, fuels corruption, and exacerbates social injustice. The public, especially in impoverished communities, suffers as their resources are siphoned off by elites who are more concerned with maintaining their wealth and power than with the well-being of their citizens. Moreover, this financial system often breeds instability, fostering environments ripe for terrorism and rogue state activities, further destabilizing entire regions.

From a democratic and justice standpoint, it is imperative that we expose and dismantle the structures that allow unregulated finance to thrive. True democracy is built on fairness, accountability, and the equitable distribution of resources, not on a system that serves the interests of a few at the expense of the many. We must demand transparency in financial systems, stronger regulations to combat money laundering, and reforms that prioritize the welfare of the people over the interests of corrupt elites. Only then can we hope to restore true democratic governance and ensure that the benefits of democracy are felt by all, not just by the powerful few.

[johnnybourgeois]

Has he been invited onto MSNBC, or are they afraid of this level of coherence and lucidity ?

[sp_budpat-amb]

I would like to see a debate between the economists affiliated with this institute with the right wing economists who consider regulation as evil and cite „socialist“ countries like Cuba, Venezuela etc. as examples of failures of regulated capitalism

[teutonic]

Wish it were possible to quadruple like a video. Phenomenal analysis. Will buy the book.

[FirstLast-vres]

When the system has failed as badly as ours has failed us, all it takes is for someone charismatic to claim that they can fix it all with one stroke of the pen...or one stroke of the sword. We're knocking on that door now. Best we fix this willingly, before it's too late. Maybe it already is.

[haavesaay]

Great book. Very well-written! Thank you Robert!

[paulblack]

Liberty Under Siege by Walter Karp is a good book on the timeline of the counter revolution's political resurgence with a sprinkling in of the changing mentality of the business elite that led them to a rather aggressive class warfare through the new MBA shock troops(cadres). Written contemporaneous in a series of essays it's a remarkable piece of writing.

[Rnankn]

It is a common fallacy to think of the post-war order as managed or organized, and neoliberalism of the 80s onward as a primacy of markets. The neoliberal era’s dirty secret, albeit in plain sight, is that it is a managed form of capitalism that uses state power to regulate society and structure the economy. This author seems to think that financial capitalism was a betrayal of the social contract, and perversion of a successful economy. Yet, it is clear whenever capital is the driving force of a society, its concentration creates political power, which further promotes its interests. The debate is not how to better obtain growth, as all capitalist growth is extraction and exploitation of communities and natural systems at an intensity that is necessarily unsustainable. And we have reached the limit. The only question now is what are the contours of a post-capitalist or post-growth economy. While this will inevitably produce backlash, that is not economic failure, it is the political rights favourite strategy - to entrench false and unrealistic expectations on a cultural level.

[GhostOnTheHalfShell]

And six years on with six days to go for the 2024 election, this interview remains deeply relevant.

[davidwilkie]

If a Functional Democracy relies on legal Good Faith, then there's no such thing as a legitimate democratic society in these dysfunctional Due Process conditions of Privatisation and Financialisation, no reliable control of Contract Law, ie unchecked and unregulated venal inducements for some Lawyers with Government influence.

Very good commentary, particularly in reference to the Kangaroo Court conditions.

[voranartsirisubsoontorn]

When some figure states that the world has created around 1, 200 trillion value of money while the world actually produced around 50 trillion value of products and services then we all can see the problem of financialization haha

[eduardantonovich]

I'm ok enough to remember the scene when Reagan was about to sign the Glass Steagal Act to history the financiers standing over him saying "hurry up and just sign it!!"...ofcourse he did and a few years later we got the 2008 financial crisis.

[slorter]

A good interview and well explained but Democracy is finished

[icecreamforcrowhurst]

“Harmonic convergence of forces.” What a wonderful description.

[corujariousa]

How still up to date his views/predictions still are!

[patricialongo]

Coping with the rest of my life under a hopeless dictatorship isn't different from growing up gaslighted in America, just later in time. Sometimes the pain can't be ignored and I'm a freaking weirdo. Normal is up beat