State Power Versus Capital Power
Tax cuts as harbingers of humanity's destruction.
Jeff Bezos (net worth: $275 billion), like John D. Rockefeller handing out shiny dimes, says that the bottom half of American earners should pay no income tax. This offers us a good opportunity to clarify and hold prominently in our minds the underlying battle for power that frames all of American politics today.
There are a number of things that can be said in response to Bezos’ comments in a CNBC interview this week. “Fuck off back to your mega-yacht and contemplate the grim reality that death will come for all of us, Jeff, you testosterone-swilling union busting devil.” That’s one. Another would be to point out, as the economist Gabriel Zucman did, that Bezos frames the discussion over taxes in an intentionally misleading way to elide the fact that low and middle income earners in America have a higher total tax burden than the very rich, which is why billionaires like Bezos love to crow about the absolute number of “billions” they pay in taxes rather than expressing such things as percentages of wealth. Another would be to note that the economic benefit of tax cuts to low earners is limited to a portion of the low amount they earn, giving them no redistributive value, which is why Republicans love to offer them in lieu of actual government benefits, which they brand derisively as “entitlements.” It does not take a very sophisticated understanding of mathematics to understand why “everyone keep more of what you earn!” is a policy that helps someone making billions of dollars more than it helps someone who earns $50,000.
Rather than rehashing these obvious points—true things that would already be well understood were it not for the fact that people with a lot of money have spent generations spending money to obscure them—I prefer to use the gift of Jeff Bezos opening his mouth as a chance to ruminate on an even more basic dynamic at work here. This is one of those things that is certainly not a novel insight, but is something worth reminding ourselves of periodically so that we don’t fuck around and lose our way.
The state, and capital. Two competing power centers. The state has the theoretical ability to limit the power of capital. In a democracy, where the state is theoretically subject to the input of the working class, and may theoretically be made to function in service of the interests of the large majority of the population who hold little capital, the power of the state is always a potential threat to the power of capital.
How powerful should the state be, and how powerful should capital be? Capital (representing both corporate interests and the rich) has a simple answer: Capital should have maximum power. Capital wants to do what it wants to do without being told that it can’t do everything it wants to do. Don’t we all!
So capital has two options. It can seek to co-opt state power—by buying politicians, influencing the electoral system with money, pursuing regulatory capture of government agencies, etc—and neutralize the desire and ability of the state to work against the interests of capital. Or, even more straightforward, it can seek to eliminate state power entirely. In addition to electing Republicans who slash regulations and eliminate state functions, the easiest way to do this is to starve the state of funding. When you starve the state of funding, you destroy its ability to carry out the regulatory actions that would limit the power of capital, even if the mandates to do so are still on the books.
Additionally, the functions that the state becomes too weak to carry out can be privatized and shifted under the control of capital, meaning that capital has the incentive not only to murder the state, but to feed on its corpse. A little added bonus.
State funding comes from taxes. The reason why the forces of capital are so intent on slashing taxes is not only because they want to keep more money in their own pockets; it is because slashing taxes defunds the government and naturally drains the hard power of the state, laws notwithstanding. You can tell the IRS to diligently monitor every billionaire’s finances in order to collect every last tax dollar legally owed, but if you lay off all the auditors at the IRS, they just won’t do it. Multiply this by every government regulatory agency. This is the perpetual battlefield of American power, which gets branded as “Red vs. Blue” and whatnot, in ways that are mostly misleading.
In modern American history, capital has owned essentially all of the Republican Party, which operates with the primary purpose of serving the interests of capital, and also has bought as much of the Democratic Party as possible, in order to neutralize the chance of substantial opposition. The main thing that has distinguished the Democratic Party from the Republican is that the Democratic Party is at least contested terrain for the interests of capital, whereas in the Republican Party it has always been a settled issue.
Normal people don’t like paying taxes, understandably, for the same reason that people don’t like big bills for any reason. That’s to be expected. The forces of capital understand this and have always sought to weaponize for their own project of starving the state. All organized anti-tax political projects should be understood through this lens. Jeff Bezos is just the latest self-interested capitalist trying to put an appealing face on tax cuts which would ultimately serve his interests. Jeff Bezos would be happy to pay a modestly higher personal tax rate in the short term in order to raise public support for cutting taxes in general in order to weaken the federal government and thereby make it easier for Jeff Bezos’s companies to do whatever they want in the long term. Weakening labor regulations and safety regulations and environmental regulations will enable Jeff Bezos and friends to add far more wealth to their own accounts in the long run than they would pay today by picking up the tab for low earners as a PR move. This is all pretty transparent.
When Democrats who should know better start touting tax cuts out of political desperation—well, that is when it is worth saying: Hey, idiots, stop. Cory Booker and Chris Van Hollen and Katie Porter and other ambitious Democrats who are pushing middle class tax cuts—rather than wealth taxes on the rich—as their signature economic proposals need to pause and look in the mirror and say, “I wonder if it is a bad sign that I have the same signature economic proposal as Jeff Bezos?” Sometimes Democrats do this because they are bought and paid for by the interests of capital, and sometimes they do it just because they think it is political clever and electorally popular, but either way, what they will accomplish if they succeed is to make the state weaker and consequently make capital itself stronger and more able to dominate the lives of humanity. I do not think it is a radical request to ask that Democrats not do that. Fucking idiots.
Into this two-way power struggle, let me remind you of one other power center that has the theoretical ability to compete in this game: labor. Organized labor can be its own power center. It is not the power of capital. It is the power of working people, organized and acting together for their common interests. In a healthy America, organized labor would be competing on an equal playing field with capital to influence the state to serve its interests. The state would have two clear, strong, powerful constituencies competing for influence: on the one hand, a few billionaires and mega-corporations, and on the other hand, the vast majority of the population, who work for a living. The weakness of organized labor in America tilts the battle for power into a two-way struggle, between capital and the state, rather than a more balanced three-way struggle between capital, workers, and the state. Needless to say, capital much prefers a simple two-way struggle. Without the power of organized labor backing it up, the state itself has less ability to resist the constant effort of capital to co-opt and destroy it. So when you contemplate our unhealthy and imperiled democracy, never forget that a strong union movement would drastically improve the entire dynamic, in favor of humanity’s interests. I wrote a book about this if you’re interested in a longer discussion of it.
Until organized labor grows substantially more powerful, we are left to watch guys worth hundreds of billions of dollars try to put a friendly face on the project of weakening government power so much that it can no longer get in the way of their ability to own everything and control all the wealth and not have to answer to anyone. Protecting state power and making that power genuinely answerable to honest democratic elections is the whole ballgame right now for 99% of us. Don’t think it is cute or clever or populist to help capital destroy the only thing holding it back from utter domination.
Extras
Related reading: Why Republicans Love to Offer You Tax Cuts; How the “Working Class Republican” Scam Works; We’re All Mice Trying to Chew Through a Trillion-Dollar Tree.
This week, I went on The Valley Labor Report, the best labor show in the South, to talk about union power and inequality and the public sector right to strike and more. I also spoke to Alternet about the rise of Christian nationalism in a Substack live, which you can watch here. Also, I spoke to the French organizer and writer Lumir Lapray about labor power, in an interview that you can read here. That interview is published in French. I don’t know what it says but it sounds very poetic. If you’d like to read a longer discussion of why organized labor is the key to solving our national predicament, you can order my book “The Hammer” from an independent bookstore. If you would like me to come speak to your college or union or other group about these things, email me.
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As someone who used to work in public relations, I often wonder who is advising these guys. There’s clearly a pivot starting here, he’s selling the big yacht, growing a little beard to look more avuncular, trying to pretend he cares about people. I don’t think he is planning to run for public office but he’s trying to shift public perception of himself and I wonder to what end.
People don't mind paying taxes when they are getting something in return. Paying for unlimited bombs to be dropped on Iran, or to bail out banks, police militarization, implementing mass surveillance, building concentration camps, and variously and lavishly subsidizing the activities of huge corporations is not exactly what people want to see. They don't want to pay for that, other than maybe 2 in 10 who are actual fascist idiots. Getting to see a doctor and receive treatment, having decent infrastructure and education, having an unpolluted environment, food that isn't poisoned with chemicals and additives - these would be things worth paying taxes for, and you would not hear a lot of complaining about taxes from the mass of the population if we had these things in good working order. Of course you also need a decent job with decent pay to pay the taxes. The rich want none of this, because of course if the government sucks and does nothing of value for you, you will see no value in paying taxes, and accept the strangulation of government as a good thing. You will not ask anything from the government, because the government is bad and can only do bad things. It's a neat trick. They can "privatize" all of their institutions of oppression by stealing any tax money there is and taking it for themselves, a handy shortcut to increase the bottom line... and then of course we "can't afford" any social betterment programs, which of course are also Socialism (!) or Holy Shit... not that! ... Yes, Communism! Then, by god, all freedom is lost! By giving us shitty government that no one can feel very good about supporting, their argument that government is bad is proven right, and the circle shall remain unbroken.