The Trump administration resembles Gramsci’s description of a Caesarian response to an ‘organic crisis’, a protracted event which comes about when ‘the forces in conflict balance each other in a catastrophic manner’, leaving space for a third party to intervene (Gramsci, 1971, 219). As this chapter and Chapter 4 demonstrate, certainty there is an intense class war in the United States. Still, the prospect of a ‘winner-takes-all’ economy has created the conditions for the escalation of intra-elite class competition in the American ruling class. By this I mean an internal Gramscian ‘war of position’ as factions are slowly, but viciously, competing to attain or retain command of the US political economy; these factions are testing and trying to restore or reconstruct a world that better caters to their particular capital accumulation strategies, seeking to gain hegemony. Again, this slow violence of intra-class struggle should not be surprising. As Marx outlined, capitalists must accumulate or be accumulated.
Concepts like hegemony and the integral state are particularly useful aids in the analysis of the current organic crisis. By hegemony – in other words, the ways in which a class or faction comes to gain the power to lead a social structure and how this power is expanded then reproduced – Gramsci proposed that cultural practices and institutions generate and induce the consent of subordinate classes. The advantage of an analysis that begins with hegemony is that it is sensitive to class warfare directed both downwards and laterally, and is in turn attentive to the formation of alliances and other kinds of pacts. Peter Thomas provides a tidy summary of the integral state as ‘the image of “political society” as a “container” of civil society, surrounding or enmeshing and fundamentally reshaping it’ (2009, 189). This conceptualization offers an expanded understanding of how capitalist societies reproduce, which
Using the term ‘organic crisis’, Gramsci described a conjecture where a prolonged crisis hinders the relatively effective management of contradictions, while concurrently the maturation of these contradictions makes it exceedingly difficult to defend them (1971, 178). By ‘war of position’, Gramsci conceived the concept as ‘the whole organizational and industrial system of the territory which lies to the back of the army in the field’ (1971, 234). I interpret this to mean the organizational infrastructure that supports political field operations seeking to constitute the political ideologies that take hold in popular culture. The value of this approach is that some factionalism in the ruling class is to be expected simply because they are also competitive market actors undertaking different capital accumulation strategies. Still, in moments of an organic crisis these factions ramp up their contests to a degree that I suggest could be considered an escalation of intra-elite competition.
This crisis involves a struggle for hegemony under conditions of extreme social inequality, and moreover one can identify that media systems are a key element in intra-elite competition, both as a site of struggle and as an instrument of that struggle. Keeping these precepts in mind, I examine several interlinked events to trace some of the front lines in the escalation of intra-elite competition. These case studies involve efforts to stave off class struggle ‘from below’. As the ruling class’s influence traverses all aspects of American society, the consequences of escalating intra-elite competition can be seen in most places. However, in this chapter I focus on the linkages between finance and formal contestations of power. In doing so, I argue that some analysts simplify the primary lines of division in contemporary class warfare.
Finally, there are two points worth relaying. First, there is little methodological to be gained by pathologizing members of the ruling class. Doing so sets in motion a too convenient, too easy dismissal of their politics which muddies a more materially grounded understanding of their motives and interests. Instead it is better to be extraordinarily attuned to the politics along the inter-class coalitions, the fault lines in their alliances and pacts, as well as how the capitalist state manages these inter-class conflicts. Second, permitting a rhetoric that dismisses writing about the ruling class as conspiratorial, but then framing their actions as not worthy of focused scholarly attention when they are revealed because it is deemed obvious, is not particularly helpful. This
Finance and class struggle
In 1960, prior to neoliberal era, 6 per cent of Harvard Business School graduates entered careers in finance. Currently over 30 per cent now make that career choice. Given these figures it is fair to say that financiers have considerable clout in the American ruling class. Most of these financiers have acquired their wealth through techniques that raised stock values. Still, much of this valuation has come about without a corresponding increase in earnings or investment in productive assets. Using a variety of metrics and quantification, and helped by management consultants, they have sought to optimize business practices for stock prices. This has led to outsourcing production to the South, or directing investments away from asset-intensive industries, the kind that produce access to secure and stable working-class lives.
Nevertheless, these financiers see themselves as the new rulers best able and positioned to guide society. Take for example remarks by Seth Klarman, a billionaire hedge fund manager. He has said that ‘with an overly narrow focus on the near-term maximization of corporate profits and share price, business leaders leave themselves vulnerable to criticism and harsh regulation’. Klarman advises that capitalists adjust their practices lest ‘capitalism’s benefits are discounted and its flaws exaggerated’ (Long, 2019). Elsewhere, Tom Steyer, another billionaire, has said ‘corporate money has corrupted our democracy and stripped Americans of our ability to determine our own future’ (Halper and Finnegan, 2019). Indeed, Steyer’s self-belief led him to enter the 2020 Democratic presidential primary to promote his vision of a just society. Michael Bloomberg, a billionaire whose wealth came from financial technology and financial media also entered the Democratic primary. As a party donor, he had lost confidence in the party’s ability to field, to his mind, a viable candidate. Eventually spending $500 million on the campaign, Bloomberg’s central messaging foregrounded moral capability backed by previous philanthropic investments (Bloomberg Philanthropies, 2020).
This accession has now seen billionaires view themselves as governors and rulers in American society. Sam Long writes, ‘It seems that these elites are not content to simply rationalize their self-interest; they also
From a Marxian perspective, financialization is not just how worker’s structurally constrained wages are further gouged by banking services, neither is it an indication of how their lives are controlled by debt instruments, nor just the fiscal looting and expropriation of the working class’s wealth. Usury and consumer indebtedness are bad things and it is right that activists seek to curtail these activities. That said, financialization encompasses more fundamental issues about how finance is colonizing ever more areas of social life, and in turn meaning that social reproduction is articulated through the logic of the financial system. This process is important to the reproduction of capital and its associated stratifications that Marx called financialization ‘secondary exploitation’. As such, financialization is not about optimization or efficiency, nor is it a concept ‘ready at hand’ to describe market practices. Rather it refers to the critical analysis of those market practices and the subsequent distributional effects. Accordingly, Ben Fine notes how the one consequence of financialization is that class relations have been displaced from ‘the sphere of production into the sphere of exchange’ (2010, 100). While this displacement has certainly altered the terms and techniques of class struggle, it has also made encoded subordination, class decomposition through indebtedness and automated inequality central venues of politics.
Michael Lind factors many of these financial development into his analysis of class warfare ‘from above’. He writes that ‘a transatlantic class war has broken out simultaneously in many countries between elites based in the corporate, financial, and professional sectors and working-class populists’. Still, he dismisses Marxian analysis as ‘deluded’ because of ‘its secularized, providential theory of history and its view of industrial workers as the cosmopolitan agents of global revolution’ (Lind, 2017). Instead he opts for a theory of elite conflict to explain the current conjuncture.
As background, Michael Lind has a central place in American politics. He began his career as a political appointee in George Bush’s state department during the Gulf War. During Bill Clinton’s administration, Lind became editor of the National Interest while writing for Harper’s, the New Republic and the New Yorker. Throughout his career he has been an extremely influential neoconservative gatekeeper, operative and man of letters. Granted, one could review the neoconservative thought of Richard Haas, Robert Kaplan or John Bolton, but Lind
Altogether, these two points mean that we can use Lind’s social and political thought as an admittedly rough and incomplete barometer for insider US policy concerns about social inequality, that is, the ideology of actually existing capitalism, as opposed to critical empirical assessments of the consequences of capitalist social relations, a task I seek to undertake in this chapter and Chapter 4.
Downplaying class differentiation
None of the dominant political ideologies of the West can explain the new class war because all of them pretend that persisting social classes no longer exist in the West. Neoliberalism – the hegemonic ideology of the transatlantic elite – pretends that class has disappeared in societies that are purely meritocratic, except for barriers to individual upward mobility that still exist because of racism, misogyny, and homophobia. Unable to acknowledge the existence of social class, much less to candidly discuss class conflicts, neoliberals can only attribute populism to bigotry or irrationality. (Lind, 2017)
Still, in Lind’s account of intra-elite competition in and among classes, the ‘managerial elite’ is the key agent of domination. These managers are ‘private and public bureaucrats who run large national and global
Following this identification and demarcation, Lind’s account of class war begins with the post-1945 social pact between technocratic managers and national labour, an apparent concession to safeguard against communism. The outcome of this pact was a ‘golden age of capitalism from the 1940s to the 1970s, combining high growth with a more equal distribution of its rewards than has ever existed before or since’. However, along with social protections, workers’ bargaining power was eroded after the Cold War as the ideological threat of communism receded. Opportunistically, managers used their dominant positions to enrich themselves, hoarding wealth at labour’s expense. The techniques for appropriation included the use of multinational corporations to coordinate mergers and corporate consolidation, the creation of transnational supply chains, favourable trade treaties and increased use of tax havens. Because of these accumulation strategies, ‘large elements of the native working classes in Western democracies have turned to charismatic tribunes of anti-system populism in electoral rebellions against the selfishness and arrogance of managerial elites’. Moreover, ‘suppressing wages and thus throttling mass consumption’, Lind suspects, will likely limit growth, in turn causing the onset of ‘a kind of high-tech rentier feudalism’. The by-product of this, Lind proposes, may be a destructive politics that oscillates between oligarchs and populists.
Within this larger turn, Sam Long discusses the corresponding rise of shareholder primacy theory in US law. This is the view that businesses should be strictly and solely concerned with the maximization of profit. Milton Friedman thought that any efforts at ‘social responsibility’ was ‘preaching pure and unadulterated socialism’. Through pinpointing key academic articles, Long provides an account of the consequences of this line of thinking which led to restructuring firms as well as enrolling the share price as a simple metric of a firm’s performance. The pursuit of this metric led to ‘cost-cutting initiatives, divestitures, and debt recapitalizations, and justify their behaviour by explaining
There is merit to Lind’s and Long’s remarks. The top 20 per cent do own nearly 90 per cent of all privately held assets (Wolff, 2017). And I generally agree with their reading of history. However, when one examines other discrete categories this reading becomes partial. Just because managers do the bidding of capitalists, they no more share the same class than do workers who do the bidding of capitalists. Moreover, there are quantitative and qualitative differences in wealth distribution between the 1 per cent and their agents. But even within this cluster, there are significant differences between the 0.01 per cent and the remainder of the 1 per cent.
When examined at this level of granularity, the central problem of Lind’s argument is that it permits the broad distribution of blame. By not identifying capitalists directly as such, Lind’s argument inadvertently deflects and diffuses acute criticism of the economic regime by including their principle agents and other professionals. One implication of this line of reasoning is that the top 20 per cent are enrolled to admit disproportionate complicity to shield their employers. In effect, they must do this additional emotional labour of confessing harm to earn their loyalty rents. By contrast, a narrower view can identify the factions within the ruling class to see the socially devastating ramifications of their various accumulation strategies.
In the coming sections I focus on how digital platforms and media become instruments used by capitalists to gain influence over the commanding heights of the American social structure. Given the age of ‘deep mediatization’, I provide the example of how Silicon Valley’s ‘information robber barons’ use their platforms to forge an ‘infrastructure for reactionary populism’. As such, the coming case corresponds to elements within Gramscian hegemony; that being how factions gain, consolidate and then reproduce power.
Information robber barons
Despite notable unionization efforts (see Greenhouse, 2019) the last few years have been notoriously tough for digital news workers. For example, in 2018 a quarter of all newspapers with circulations above
These events are not disconnected from one another. Rather they form part of a coordinated attempt to capture the means of production, circulation and consumption of information to limit the power of challenge. Let me explain using Gawker’s closure. For several years Peter Thiel funded third-party litigation cases against Gawker, one of which resulted in the bankruptcy of the site in 2016. Thiel admits that his actions against Gawker are “less about revenge and more about specific deterrence” (Sorkin, 2016; also see Thiel, 2016). Indeed, he has been associated with this tactic before. For example, Palantir, whose largest stakeholder is Thiel, planned to smear Glenn Greenwald because of his coverage of the company’s military sales (Lipton and Savage, 2011). As a co-founder of PayPal and investor in LinkedIn, Lyft, Spotify, Reddit, Airbnb and SpaceX, Thiel is a core figure in data politics, one who famously stated that ‘I no longer believe that freedom and democracy are compatible’ (Thiel, 2009). That digital venture capitalists like Vinod Khosla, Chris Sacca and Jessica Livingston applauded Thiel’s litigation speak to how the digital elite are perceived as preferring to avoid public scrutiny of Silicon Valley, which was the kind of reporting that Gawker undertook (Streitfeld and Isaac, 2016).
of course, the fact that Review founder Peter Thiel went on to found PayPal has certainly helped the paper’s financial condition. However, the success of Thiel and other undergraduates at developing a solid fundraising base placed The Review on solid financial footing well before the dotcom boom of the late 1990s. (New, 2012)
But beyond being a venue for campus libertarianism, the Review (where Theil remains on the board of directors) functions as a kind of proving house for undergraduates interested in joining one of Thiel’s many ventures. Granato’s (2017) research shows that around 100 Review alumni have ‘been roommates, invested in each other’s companies, and collaborated on political activities’. Theil’s patronage can be seen elsewhere. He wrote an endorsement for Milo Yiannopoulos’ book, Dangerous, made a $1.25 million denotation to Donald Trump’s 2016 presidential campaign (Streitfeld, 2016) and was a member of the transition team for the Trump administration (Woolf and Wong, 2016).
These vignettes illustrate the potential for any billionaire or member of the ruling class to unilaterally destroy almost any media outlet by secretly funding multiple legal suits regardless of merit and regardless of whether they lose. As litigation costs are prohibitively expensive for most media outlets, and as only in rarest cases does the court order a losing party to pay the other side’s costs, so billionaires can destroy media outlets even if the suits do not prevail. Given that most US media outlets are struggling financially, they are particularly vulnerable to this tactic. To elaborate, Elizabeth Grieco’s (2020) collection of figures shows that in 2018 US newspaper circulation was the lowest since 1940, revenues had decreased ‘from $37.8 billion in 2008 to $14.3 billion in 2018’, while in that same period employment nearly halved, ‘from 71,000 workers to 38,000’. Together this vulnerability weakens the constant realization of freedom of expression as a political right, but also reduces the tools needed to help undertake class struggle ‘from below’.
Lest one suspect that these kinds of actions are the sole preserve of reactionaries, progressive neoliberals have also been experimenting with digital new media. Approached by Donald Graham, Jeff Bezos bought the Washington Post in 2013 for $250 million. “I didn’t know
The difficultly of this kind of patronage is that it is conditional. For example, since 1999 Eric Schmidt, members of his family and Google have given upwards of $21 million to the New America Foundation. Based in Washington, DC and currently employing over 200 people, the foundation is a prominent, if not the preeminent, Democratic think tank. In 2016 Schmidt became the chairperson of New America. In June of that year the New America Foundation retracted a blog post which drew critical attention to Google’s European antitrust practices (see New America, 2017a). The post came from the Open Markets section, whose mandate was to review the market dominance of major American technology and communication companies like Google, Amazon and Facebook. Barry Lynn, who headed up Open Markets, as well as ten other researchers in the section, were subsequently fired (Rushe, 2017). Due to their work on platform monopolies, Lynn and his team had previously been warned by Anne-Marie Slaughter, the president and CEO of New America, in correspondence to them saying: ‘We are in the process of trying to expand our relationship with Google on some absolutely key points […] just THINK about how you are imperiling [sic] funding for others’ (New America, 2017b).
Whereas conservative media entities like Fox News or Breitbart News tend to be unapologetic about their political agendas, platforms like Google and Facebook deploy a rhetoric which positions them as infrastructure companies rather than as media content companies. Part of this positioning is to avoid the responsibility for, and thus
Together the ordinariness of litigation and patronage aid the supremacy of digital platforms. They also create conditions where citizens are interpolated as consenting users, in turn becoming tokens to be fought with and over by the various blocs, whether they be directed by Thiel or Zuckerberg, each seeking to gain hegemony. And so, by using their capital and control of platforms, the ‘new digital men of power’ can support or hinder the consumption of content of digital news outlets; in effect, controlling the means of mental production.
Infrastructures for reactionary politics
As Piketty (2014) has demonstrated, rents return more than growth. This is one explanation why Charles and the late David Koch’s combined fortune grew from $28 billion in 2009 to nearly $100 billion a decade later (Mayer, 2016; Cain and Rogers, 2019). Well-known Republican donors in Obama’s first term, of late they have been joined by the Mercer family as emblematic symbols of plutocratic wealth (for the definitive studies of the influence and impact of Koch political funding see Skocpol and Williamson, 2013; Mayer, 2016). Robert Mercer made his fortune in hedge fund management. As one of the main protagonists behind financialization, he used his skills as
As a member of the Council for National Policy, for nearly a decade the Mercer Foundation funded right-wing infrastructure (Mayer, 2017). Known highlights of the political patronage includes giving the Citizens United Foundation $3.6 million of funding (Levine, 2017). In roughly the same period they gave $11 million to the Media Research Center (Kutner, 2016). The Media Research Center’s (2017) aim is to ‘neutralize the propaganda arm of the Left: the national news media’. These funds allowed a variety of political operations: a truncated list at the national level includes anti-Obama messaging campaigns and the targeting of key federal agencies like the Securities and Exchange Commission or the Department of Justice. During election cycles, they funded far-right rivals to more moderate Republican members of Congress like John McCain. The foundation single-handedly created the ‘Ground Zero Mosque’ media event.
The Mercers’ political spending was enabled by the 2010 Citizens United ruling. This ruling lifted limits on corporate and non-profit organization spending during elections, precipitated a change in how political parties organized themselves. While never realized in its ideal form, prior to the judgement a party’s platforms were somewhat organic expressions of the collective agenda of its membership. However, following Citizens United, the 0.01 per cent, the mega donors, have greater sway in the formation of a party’s hidden manifesto. Indeed, the Citizens United era more easily permits members of the ruling class to alter politics and public policy, often without much awareness of the direct causal connections between specific donations and specific policy formation. What I mean is that people are aware in general of the sway, but due to the opacity of government bureaucracy have difficulty in pointing to particular instances of undue influence.
Following the Citizens United ruling, the Kochs championed a strategy where donors would pool funds to amplify political operatives for the 2012 presidential election. As per Jane Mayer’s (2017) research, the Mercers contributed $25 million to this project. Mayer describes how after being soundly disappointed by Obama’s landslide victory, Rebekah Mercer spearheaded a reorientation towards a data-centric approach that optimized social media platforms to drive broadcast media narratives. As K. Sabeel Rahman and Hollie Gilman note in their work on contemporary civic power in the US, ‘in addition to short-term campaign funding, the Mercers similar to the Koch brothers, have invested in long-term infrastructure on the right’ which included investing ‘$10 million in Breitbart News in 2011’ (2019, 77). These funds
Learning from the media ecology of Breitbart’s experience on Facebook, plus ‘having revolutionized the use of data on Wall Street, [Robert Mercer] was eager to accomplish the same feat in the political realm’ (Mayer, 2017). As Mayer explains, the Mercers invested $5 million in Cambridge Analytica in the hope of using data analytics to ‘micro-target’ voters during elections. Turning to the 2016 US election, initially supporting Ted Cruz in the Republican primary (with an $11 million donation to a PAC run by Kellyanne Conway), the Mercers pivoted to Trump as his momentum built. After Trump’s electoral victory, Rebekah Mercer was involved in the Executive Committee of Trump’s transition team. Other Mercer operatives like Steve Bannon and Conway also took up important positions in the Trump administration. As Bannon has said, ‘the Mercers laid the groundwork for the Trump revolution. Irrefutably, when you look at donors during the past four years, they have had the single biggest impact of anybody, including the Kochs’ (Mayer, 2017). The Mercers’ political patronage has not come without some costs. Sleeping Giants petitioned stockholders of Renaissance, like Michigan State University who has $50 million invested, to abandon Robert Mercer as the co-chief executive officer. In November 2017, Mercer indicated he would resign as co-CEO of Renaissance Technologies at the end of the year (Goldstein et al, 2017; Mider, 2017). Still, these costs hardly offset the gains.
Ruling class solidarity
The Cambridge Analytica scandal, with Mercer and Thiel as central characters, is a good demonstration that capital is destabilizing precisely because it allows plutocrats to interfere in international politics without much, if any, oversight. We might never know if Cambridge Analytica did successfully influence the 2016 US presidential election, but that they tried to do so is significant enough to raise questions about how factions within the American ruling class are looking for every possible advantage to gain hegemony. Still, it is worth remembering
