The corporate liberal policies adopted to deal with under-consumption contain the seeds of an opposing crisis tendency: under-accumulation. Labor unionism, Keynesianism, and other means of increasing aggregate demand also reduce the funds available for investment.

Taxation to support the welfare state and other forms of what James O'Connor called "public consumption" reduces the pool of funds available for private investment. At the same time, the increased bargaining power of labor resulting from the corporate liberal social compact increases the portion of the product consumed by workers.

To the extent that the value of labor-power is socially determined, the increased bargaining power of labor and the revolution of rising expectations increases the cost of variable capital and reduces the mass of surplus value available for reinvestment. Under the corporate liberal social compact, according to O'Connor,

The effect of both trends is to increase the overall level of consumption and create a shortfall in new investment.

This is potentially catastrophic for the survival of capitalism. Capitalism, paradoxically, requires constant new accumulation, even when it suffers the consequences of past over-accumulation. One temporary solution to over-accumulation is new investment; the latter is essential to keep previously accumulated capital profitable. As Marx pointed out in Volume Three of Capital, the falling rate of profit due to over-accumulation can be offset by increasing the productivity of labor (i.e., the rate of "relative surplus value"). This is accomplished by new investment in improved processes. To paraphrase Al Smith, the solution to the crisis of over-accumulation is more accumulation. The economy is balanced on pinpoint, as in a Ponzi scheme, with further subsidized accumulation necessary to render existing over-accumulated capital profitable. And each such new wave of accumulation, to be profitable, will itself require still further accumulation. So statist solutions to over-accumulation directly impede the further accumulation necessary to keep old investments profitable.

The state may also respond by eating up surplus capital with unproductive outlets like military spending; but this, too, reduces the rate of accumulation which, paradoxically, is necessary to solve the problems of previous over-accumulation.

The levels of state expenditure necessary to underwrite the operating costs of capital and render investment productive create a fiscal crisis, parallel to the crisis of accumulation.

Large-scale state capitalist intervention, generally identified with Whigs and Republicans in the mid-nineteenth century, led to a centralization of the economy in the hands of large producers. This system was inherently unstable, and required still further state intervention to solve its contradictions. The result was the full-blown state capitalism of the twentieth century, in which the state played a direct role in subsidizing and cartelizing the corporate economy. Despite such intervention, though, state capitalism was still unstable. As regulatory cartelization advanced from the "Progressive" era on, the problems of overproduction and surplus capital were further intensified by the forces described by Stromberg in the previous two chapters, with the state resorting to ever greater, snowballing foreign expansionism and domestic corporatism to solve them. They eventually led to New Deal corporate state, to a world war in which the U.S. was established (in Samuel Huntington’s words) as "hegemonic power in a system of world order," and an almost totally militarized high tech economy.

A positive rate of profit, under twentieth century state capitalism, was possible only because the state underwrote so much of the cost of reproduction of constant and variable capital, and undertook "social investment" which increased the efficiency of labor and capital and consequently the rate of profit on capital.³ And monopoly capital's demands on the state are not stable over time, but steadily increase:

O'Connor did not adequately deal with a primary reason for the fiscal crisis: the increasing role of the state in performing functions of capital reproduction removes an ever-growing segment of the economy from the market price system. The removal of the price feedback system, which in a free market ties quantity demanded to quantity supplied, leads to ever-increasing demands on state services. When the consumption of some factor is subsidized by the state, the consumer is protected from the real cost of providing it, and unable to make a rational decision about how much to use. So the state capitalist sector tends to add factor inputs extensively, rather than intensively; that is, it uses the factors in larger amounts, rather than using existing amounts more efficiently. The state capitalist system generates demands for new inputs from the state geometrically, while the state's ability to provide new inputs increases only arithmetically. The result is a process of snowballing irrationality, in which the state's interventions further destabilize the system, requiring yet further state intervention, until the system's requirements for stabilizing inputs exceed the state's resources. At that point, the state capitalist system reaches a breaking point.

Probably the best example of this phenomenon is the transportation system. State subsidies to highways, airports, and railroads, by distorting the cost feedback to users, destroy the link between the amount provided and the amount demanded. The result, among other things, is an interstate highway system that generates congestion faster than it can build or expand the system to accommodate congestion. The cost of repairing the most urgent deteriorating roadbeds and bridges is several times greater than the amount appropriated for that purpose. In civil aviation, at least before the September 11 attacks, the result was planes stacked up six high over O'Hare airport. There is simply no way to solve these crises by building more highways or airports. The only solution is to fund transportation with cost-based user fees, so that the user perceives the true cost of providing the services he consumes. But this solution would entail the destruction of the existing centralized corporate economy. For example, when the UK experimented with toll-roads as a method of funding, the attempt to make users pay the full cost of the transportation services they consumed only resulted in truckers being driven onto secondary roads.

The same law of excess consumption and shortages manifests itself in the case of energy. When the state subsidizes the consumption of resources like fossil fuels, business tends to add inputs extensively, instead of using existing inputs more intensively. Since the incentives for conservation and economy are artificially distorted, demand outstrips supply. But the energy problem is further complicated by finite reserves of fossil fuels. According to an article in the Oil and Gas Journal last year,

During the shortages of the late '70s, Warren Johnson predicted that a prolonged energy crisis would lead, through market forces, to a radical decentralization of the economy and a return to localism.⁷ Like every other kind of state intervention, subsidies to transportation and energy lead to ever greater irrationality, culminating in collapse.

Other centralized offshoots of the state capitalist system produce similar results. Corporate agribusiness, for example, requires several times as much synthetic pesticide application per acre to produce the same results as in 1950--partly because of insect resistance, and partly because pesticides kill not only insect pests but their natural enemies up the food chain. At the same time, giant monoculture plantations typical of the agribusiness system are especially prone to insects and blights which specialize in particular crops. The use of chemical fertilizers, at least the most common simple N-P-K varieties, strips the soil of trace elements--a phenomenon noted long ago by Max Gerson. The chemical fillers in these fertilizers, as they accumulate, alter the osmotic quality of the soil--or even render it toxic. Reliance on such fertilizers instead of traditional green manures and composts severely degrades the quality of the soil as a living biological system: for example, the depletion of mycorrhizae which function symbiotically with root systems to aid absorption of nutrients. The cumulative effect of all these practices is to push soil to the point of biological collapse. The hardpan clay on many agribusiness plantations is virtually sterile biologically, often with less than a single earthworm per cubic yard of soil. The result, as with chemical pesticides, is ever increasing inputs of fertilizer to produce diminishing results.

In every case, the basic rule is that, whenever the economy deviates from market price as an allocating principle, it deviates to that extent from rationality. In a long series of indices, the state capitalist economy uses resources or factors much more intensively than would be possible if large corporations were paying the cost themselves. The economy is much more transportation-intensive than a free market could support, as we have seen. It is likewise more capital-intensive, and more intensively dependent on scientific-technical labor, than would be economical if all costs were borne by the beneficiaries. The economy is far more centralized, capital intensive, and high-tech than it would otherwise be. Had large corporate firms paid for these inputs themselves, they would have reached the point of zero marginal utility from additional inputs much earlier.

At the same time as the demand for state economic inputs increases, state capitalism also produces all kinds of social pathologies that require "social expenditures" to contain or correct. By subsidizing the most capital-intensive forms of production, it promotes unemployment and the growth of an underclass. But just as important, it undermines the very social structures--family, church, neighborhood, etc.--on which it depends for the reproduction of a healthy social order.

Those who believe the market and commodity production as such inevitably suck all social relations into the "cash nexus," and undermine the stability of autonomous social institutions, are wrong. But this critique, while not valid for the market as such, is valid for state capitalism, where the state is driven into ever new realms in order to stabilize the corporate system. State intervention in the process of reproducing human capital (i.e., public education and tax-supported vocational-technical education), and state aid to forms of economic centralization that atomize society, result in the destruction of civil society and the replacement by direct state intervention of activities previously carried out by autonomous institutions. The destruction of civil society, in turn, leads to still further state intervention to deal with the resulting social pathologies.

The free market criticism of these phenomena closely parallels that of Ivan Illich in Tools For Conviviality.⁸ Illich argued that the adoption of technologies followed a pattern characterized by two thresholds (or "watersheds"). The first threshold was one of high marginal utility for added increments of the new technology, with large increases in overall quality of life as it was introduced. But eventually a second threshold was reached, at which further increments produced disutilities. Technologies continued to be adopted beyond the level at which they positively harmed society; entire areas of life were subject to increased specialization, professionalization, and bureaucratic control; and older forms of technology that permitted more autonomous, local and individual control, were actively stamped out. In all these areas of life, the effect was to destroy human-scale institutions and ways of doing things, amenable to control by the average person.

In medicine, the first threshold was identified with the introduction of septic techniques, antibiotics, and other elementary technologies that drastically reduced the death rates. The second was identified with intensive reliance on extremely expensive medications and procedures with only marginally beneficial results (not to mention iatrogenic diseases), the transformation of medicine into a priesthood governed by "professional" bureaucracies, and the loss by ordinary people of control over their own health. The automobile reached the second threshold when it became impossible for most people to work or shop within walking or bicycle distance of where they lived. The car ceased to be a luxury, and became a necessity for most people; a lifestyle independent of it was no longer an option.

Those who criticize such aspects of our society, or express sympathies for the older, smaller-scale ways of life, are commonly dismissed as nostalgic, romantic--even Luddites. And such critiques are indeed, more often than not, coupled with calls for government regulation of some kind to protect quality of life, by restraining the introduction of disruptive technologies. The worst such critics idealize the "Native American" practice of considering the effects of a technology for "six generations" before allowing it to be adopted. Illich himself fell into this general category, considering these issues to be a proper matter for grass-roots political control ("convivial reconstruction").

But in fact, it is quite possible to lament the loss of human scale society ("Norman Rockwell's America"), and to resent the triumph of professionalization and the automobile, all the while adhering to strictly free market principles. For government, far from being the solution to these evils, has been their cause. Illich went wrong in treating the first and second thresholds, respectively, as watersheds of social utility and disutility, without considering the mechanism of coercion that is necessary for social disutility to exist at all. In a society where all transactions are voluntary, no such thing as "social disutility" is possible. Net social disutility can only occur when those who personally benefit from the introduction of new technologies beyond the second threshold, are able to force others to bear the disutilities. As we have already seen in our citations of O'Connor's analysis, this is the case in regard to a great deal of technology. The profit is privatized, while the cost is socialized. Were those who benefited from greater reliance on the car, for example, for example, forced to internalize all the costs, the car would not be introduced beyond the point where overall disutilities equaled overall utilities. As Kaveh Pourvand elegantly put it in a private communication, the state's intervention promotes the adoption of certain technologies beyond Pareto optimality.⁹ Coercion, or use of the "political means," is the only way in which one person can impose disutility on another.

The state capitalist system thus demands ever greater state inputs in the form of subsidies to accumulation, and ever greater intervention to contain the ill social effects of state capitalism. Coupled with political pressures to restrain the growth of taxation, these demands lead to (as O'Connor's title indicates) a "fiscal crisis of the state," or "a tendency for state expenditures to increase faster than the means of financing them."¹⁰ The "'structural gap' ...between state expenditures and state revenue" is met by chronic deficit finance, with the inevitable inflationary results. Under state capitalism "crisis tendencies shift, of course, from the economic into the administrative system..." This displaced crisis is expressed through "inflation and a permanent crisis in public finance."¹¹

The problem is intensified by the disproportionate financing of State expenditures by taxes on the competitive sector (including the taxes on the monopoly capital sector which are passed on to the competitive sector), and the promotion of monopoly capital profits at the expense of the competitive sector. This depression of the competitive sector simultaneously reduces its purchasing power and its strength as a tax base, and exacerbates the crises of both state finance and demand shortfall.

The crisis of inputs under state capitalism is further heightened by the state's promotion of the inefficiencies of large size. Most large corporations have been expanded far beyond pareto-optimal levels by government intervention to subsidize operating expenses and conceal the inefficiency cost of large-scale organization.

In addition, existing firms are forced to be even more hierarchical and authoritarian than they otherwise would be because of past actions of the state. Not only were the producing classes originally robbed of their property in the means of production, but the state has intervened on an ongoing basis to decrease the bargaining power of labor and increase the rate of exploitation. For example, consider the action of the ruling class in the '70s to break the power of organized labor, cap real wages, and shift resources from mass consumption to investment. The result was stagnant wages, increasing work loads (aka "increased productivity), and need for all sorts of internal surveillance and control mechanisms within the corporation to keep the increasingly disgruntled work force in line.

These large corporations have the internal characteristics of a planned economy. Information flow is systematically distorted up the chain of command, by each rung in the hierarchy telling the next one up what it wants to hear. And each rung of management, based on nonsensical data (not to mention absolutely no direct knowledge of the production process) sends irrational and ass-brained decisions back down the chain of command. The only thing that keeps large, hierarchical organizations going is the fact that the productive laborers on the bottom actually know something about their own jobs, and have enough sense to ignore policy and lie about it so that production can stagger along despite the interference of the bosses.

When a senior manager decides to adopt a "reform" or to "improve" the process in some way, he typically bases his decision on the glowing recommendations of senior managers in other organizations who have adopted similar policies. Of course, those senior managers have no real knowledge themselves of the actual results of the policy, because their own information is based on filtered data from below. Not only does the senior management of an organization live in an imaginary world as a result of the distorted information from below; its imaginary world is further cut off from reality by the professional culture it shares with senior management everywhere else. “…in a rigid hierarchy, nobody questions orders that seem to come from above, and those at the very top are so isolated from the actual work situation that they never see what is going on below.”¹²

The root of the problem, in all such cases, is that individual human beings can only make optimally efficient decisions when they internalize all the costs and benefits of their own decisions. In a large hierarchy, the consequences of the irrational and misinformed decisions of the parasites at the top are borne by the people at the bottom who are actually doing the work. And the people doing the work, who both know what's going on and suffer the ill effects of decisions by those who don't know what's going on, have no direct control over the decision-making.

Robert Anton Wilson described it in grand terms as the workers’ burden of nescience confronting management’s burden of omniscience:

The only thing that keeps the organizations running is the fact that the people on the bottom who know how to do the work have the good sense to ignore directives from above; that, and the fact that each organization is competing against other organizations hobbled by the same institutional culture. The "genius of our centralized bureaucracies has been," as Paul Goodman put it, "as they interlock, to form a mutually accrediting establishment of decision-makers, with common interests and a common style...."¹⁴

In fact, corporations grow to such size and internal complexity that it no longer pays even to attempt to track the costs of such internal transactions. That would be fine in a free market, where a firm as a whole internalized all its own costs and benefits. In that case, the inefficiency costs of internal complexity and lack of cost tracking would be weighed against other offsetting efficiencies, and growth would stop at the point where they cancelled out. But the matter is different when they keep growing because the state protects them from the inefficiencies of their own size. Mises pointed out that large private corporations were prone to the same problems of economic calculation as a planned economy. The larger a corporation, the more of its internal decisions are administrative rather than market transactions, and the further they are removed from actual market prices. An internal corporate planner, allocating resources administratively, relies indirectly on outside market prices as a source of information in the same way as a state planner in a state-managed economy.

In the Spanish workplaces after the revolution of 1936, unit costs were decreased drastically, and output increased. The reason was that power flowed from the bottom up, and the people making the decisions were directly accountable to the people doing the work. As a result, all the consequences of action were much more fully internalized by those making decisions.

This principle applies, not only in for-profit corporations, but in universities, charities, and other large organizations in "civil society." The New Class paradigm of "professional management" has affected the structure of all large organizations in state capitalist society. In every case, the organization is either subject to outside control by a board of trustees, or to a top-down internal management. Paul Goodman has brilliantly described this tendency, as it operates in a wide variety of organizations. Such organizations come under the domination of a professionalized management, and politically selected senior administrators with "prestige salaries." Because the organization distributes the costs and benefits of action among different people, the masses of productive workers within it are no longer motivated by the intrinsic pleasures of work. Instead, personnel must be subject to administrative compulsion or other forms of extrinsic motivation.

This is the style of organization the overwhelming majority of people work in. Most people have little or no say in their conditions or methods of work, and have no motive for doing it "well" than the need for a paycheck and the fear of being fired. Indeed, the people who evaluate the quality of their work have no clue what quality might actually consist of.

When the prestige-salaried head of a large organization retires, he is never replaced by a production worker from within the organization, who actually understands the process and might make intelligent decisions. Instead, the trustees or directors select from a wide array of resumè carpet-baggers with a history of holding senior management positions in other large organizations. The new head is someone who has thoroughly absorbed the professional culture of senior management, but has never engaged in genuinely productive work in his life.

When the personnel of an organization have no direct interest in its purpose, intrinsic motivation must be replaced by external compulsion. This passage from Ursula LeGuin's The Dispossessed is an excellent illustration:

Paul Goodman used the university to illustrate the principle. Unlike the medieval university, which was a self-organized association of scholars and students, the modern university reflects a purpose imposed from outside. As a result,

In becoming the standard form of organization in the dominant and most influential institutions of our society, the bureaucratic paradigm in industry, education and welfare effectively crowds out or preempts alternative forms of organization based on bottom-up control and decentralism. "Nobody will be able to imagine such a thing. In brief, ...the inevitability of centralism will be self-proving. A system destroys its competitors by pre-empting the means and channels, and then proves that it is the only conceivable mode of operating."¹⁹

State capitalism involves "[r]e-coupling the economic system to the political.... The state apparatus no longer, as in liberal capitalism, merely secures the general conditions of production..., but is now actively engaged in it."²⁰ That is, capitalism abandons the "laissez-faire" model of state involvement mainly through the enforcement of a general legal framework, and resorts instead to direct organizational links and direct state inputs into the private sector.

The direct intervention of the state on behalf of corporate elites becomes ever greater, and impossible to conceal. This fundamentally contradicts the official ideology of "free market capitalism," in which the state simply acts as a neutral guarantor of a social order in which the most deserving win by their own efforts. Therefore, it undermines the ideological basis on which its popular legitimacy depends. Thus, parallel to the fiscal crisis of the state, state capitalism likewise moves towards what Habermas called a "legitimation crisis."

When the state capitalist system finally reaches its limits, the state becomes incapable of further increasing the inputs on which the system depends. The fundamental contradictions of the system, displaced from the political/administrative realm, return with a vengeance in the form of economic crisis. The state capitalist system will reach its breaking point.

The American corporate elite reacted in the 1970s to the combination of fiscal, accumulation and legitimation crises by adopting a neoliberal agenda of curtailing consumption and subsidizing new accumulation. Along with these new policies, it adopted the forms of political control necessary to force them on a recalcitrant population.

Until the late 1960s, the elite perspective was governed by the New Deal social compact. The corporate state would buy stability and popular acquiescence in imperialist exploitation abroad by guaranteeing a level of prosperity and security to the middle class. In return for higher wages, unions would enforce management control of the workplace. As Richard K. Moore put it, prosperity would guarantee public passivity.²³ But starting in the Vietnam era, the elite's thinking underwent a profound change.

They concluded from the 1960s experience that the social contract had failed. Besides unprecedented levels of activism in the civil rights and antiwar movements, and the general turn toward radicalism among youth, the citizenry at large also became less manageable. There was a proliferation of activist organizations, alternative media, welfare-rights organizations, community activism, etc.

Elite intellectuals like Samuel P. Huntington lamented the drastic decrease in the level of trust of government and other leading institutions among the general public. In The Crisis of Democracy, written by Huntington and others as an inagural paper for the Trilateral Institution (an excellent barometer of elite thinking), the authors argued that the system was collapsing from demand overload, because of an excess of democracy. Huntington's analysis is so illustrative of elite thinking at that time that we will quote it at length.

For Huntington, America's role in maintaining the global state capitalist system depended on a domestic system of power; this system of power, variously referred to in this work as corporate liberalism, Cold War liberalism, and the welfare-warfare state, assumed a general public willingness to stay out of government affairs. For the first two decades or so after WWII, the U.S. had functioned as "the hegemonic power in a system of world order."²⁴ And this was only possible because of a domestic structure of political authority in which the country "was governed by the president acting with the support and cooperation of key individuals and groups in the Executive office, the federal bureaucracy, Congress, and the more important businesses, banks, law firms, foundations, and media, which constitute the private establishment."²⁵

America's position as defender of global capitalism required that its government have the ability "to mobilize its citizens for the achievement of social and political goals and to impose discipline and sacrifice upon its citizens in order to achieve these goals."²⁶ Most importantly, this ability required that democracy be largely nominal, and that citizens be willing to leave major substantive decisions about the nature of American society to qualified authorities. It required, in other words, "some measure of apathy and non-involvement on the part of some individuals and groups."²⁷

Unfortunately, these requirements were being gravely undermined by "a breakdown of traditional means of social control, a delegitimation of political and other means of authority, and an overload of demands on government, exceeding its capacity to respond."²⁸

The task of traditional state capitalist elites, in the face of this crisis of democracy, was to restore that "measure of apathy and noninvolvement," and thus to render the system once again "governable."³⁰

In response to the antiwar protests and race riots, LBJ and Nixon began to create an institutional framework for coordination of police state policy at the highest levels, to make sure that any such disorder in the future could be dealt with differently. This process culminated in Department of Defense Civil Disturbance Plan 55-2, Garden Plot, which involved domestic surveillance by the military, contingency plans for military cooperation with local police in suppressing disorder in all fifty states, plans for mass preventive detention, and joint exercises of police and the regular military. Senator Sam Ervin, of the Subcommittee on Constitutional Affairs, claimed that "Military Intelligence had established an intricate surveillance system covering hundreds of thousands of American citizens. Committee members had seen a master plan--Garden Plot--that gave an eagle eye view of the Army-National Guard-police strategy." (Of course, much of the apparatus needed for preventive detention of "subversives" had been in place since the McCarran Internal Security Act of the Truman era.)

The New Deal social compact with organized labor was reassessed in the light of new events. The country was swept by a wave of wildcat strikes in the early 1970s, in coal mining, auto manufacturing, and the post office. These disruptions indicated that the business unions could no longer keep their rank and file under control, and that the Fordist system was no longer serving its purpose of maintaining social control in the workplace.

At the same time, the business press was flooded with articles on the impending "capital shortage," and calls for shifting resources from consumption to capital accumulation, by radically scaling back the welfare state and hamstringing organized labor. This shift was reflected in traditionally corporate liberal think tanks like Brookings and the CED, which both produced studies acknowledging the need to impose limits on consumption in the interest of accumulation; for example, the Brookings Institution's 1976 study Setting National Priorities: The Next Ten Years.³²

Business journals predicted frankly that a cap on real wages would be hard to force on the public in the existing political environment.³³ For example, an article in the October 12, 1974 issue of Business Week warned that

This only heightened the imperative to curb the excess of democracy and make the state less vulnerable to popular pressure.

Corporations embraced the full range of union-busting possibilities in Taft-Hartley, risking only token fines from the NLRB. They drastically increased management resources devoted to workplace surveillance and control, a necessity because of discontent from stagnant wages and mounting workloads (aka increased "productivity").³⁵ Not surprisingly, workplace violence ("going postal") escalated along with general levels of employee disgruntlement. The use of internal surveillance systems and personality profiling to detect disgruntlement and weed out those with bad attitudes toward authority, not to mention to track down those guilty of quiet and unobtrusive sabotage, became a central preoccupation with the new Chekists in Human Resources departments.

Wages as a percentage of value added have declined drastically since the 1970s, and real wages have been virtually flat. Virtually all increases in labor productivity have been channeled into profit and investment, rather than wages. The new Cold War military buildup, from the late '70s on, still further transferred public resources to industry.

A series of events like the fall of Saigon, the nonaligned movement, and the New International Economic Order were taken as signs that the transnational corporate empire was losing control. The national security community saw America's "system of world order" coming under increasing pressure from national liberation movements. An excellent example of foreign policy elites' view of the near future is the work of RAND analyst Guy Pauker, who wrote in 1977 of a "possible world order crisis in the 1980s."³⁶

Reagan's escalating intervention in Central America was a partial response to this perception. But more importantly, the collapse of the USSR ended all external restraints on the global system designed during WWII, and deprived internal resistance to that system of the Soviet Union's patronage. In the aftermath of this snatching of total victory from the jaws of defeat, the Uruguay Round of GATT ended all barriers to TNCs buying up entire economies, locked the west into monopoly control of modern technology, and created a world government on behalf of global corporations.

This was, in its essentials, the development that James O'Connor had foreseen in 1984--years before the fall of the Berlin Wall and the implosion of the USSR:

In the meantime the U.S. was moving toward radical polarization of income. The general effect of the neoliberal reaction was to blur the lines between imperial core and periphery: the comprador bourgeoisie, living in heavily fortified luxury sectors of Third World cities, coexisted with the gated communities of America as elements of the core; at the same time, something resembling a Third World society has arisen in parts of what was traditionally the First World. The inner city and the depopulated countryside, the seats of urban and rural squalor, respectively, were subject to increasing surveillance and brutality under the guise of the War on Drugs. "Most of the world has been turned into a periphery; the imperial core has been boiled down to the capitalist elite themselves...."³⁸

As policy elites attempted to transform the country into a two-tier society, a kinder and gentler version of the Third World pattern, the threat of public discontent forced the government to greater and greater levels of authoritarianism.

"The Rubicon," Moore concludes, "has been crossed--the techniques of oppression long common in the empire's periphery are being imported to the core."³⁹

With the help of the Drug War, and assorted Wars on Gangs, Terrorism, etc., the apparatus of repression continued to grow. The Drug War has turned the Fourth Amendment into toilet paper; civil forfeiture, with the aid of jailhouse snitches, gives police the power to steal property without ever filing charges--a lucrative source of funds for helicopters and kevlar vests. SWAT teams have led to the militarization of local police forces, and cross-training with the military has led many urban police departments to view the local population as an occupied enemy.⁴⁰

Reagan's old California crony Giuffrida resurfaced in the '80s as head of FEMA, where he worked with Oliver North to fine-tune Garden Plot. North, as the NSC liaison with FEMA from 1982-84, developed a plan "to suspend the constitution in the event of a national crisis, such as nuclear war, violent and widespread internal dissent or national opposition to a U.S. military invasion abroad."⁴¹ Garden Plot, interestingly, was implemented locally during the Rodney King Riots and perhaps also in recent anti-globalization protests.⁴² Delta Force provided intelligence and advice in those places and at Waco.⁴³

The apparatus of the police state ratcheted further upward during the Clinton administration, with the passage of the so-called Counter-Terrorism Bill in 1996. The Clinton Bill, arguably more dangerous than anything since done by Ashcroft, gave the President blanket authority to declare any organization "terrorist" by executive fiat, and then to seize its assets without due process of law. Since then, seizing on the opportunity presented by the 9-11 attacks, Ashcroft's Justice Department was able to push through (via the USA Patriot Act) a whole laundry list of police state measures desired by the FBI that Congress had been unwilling to swallow five years earlier.

The post-911 growth of the police state dovetails nicely with the pre-911 reaction against the anti-globalization movement, which since Seattle had replaced the so-called constitutionalist or militia movement as a chief concern of federal law enforcement.⁴⁴ John Timoney, Philadelphia Police Commissioner during the August 2000 police riot at the Republican National Convention,⁴⁵ has been a close associate of Homeland Security Director Tom Ridge. Before 9-11, Timoney was a vocal enemy of the "international anarchist" conspiracy to disrupt globalization meetings, and advocated the use of RICO statute and harsh federal law enforcement tactics to break the anti-globalization movement. In August 2000, he made what was arguably the most drastic, thorough, and creative use of police spying, harassment, preventive arrest of activists on trumped up charges, of any local police official involved in fighting the post-Seattle movement.⁴⁶ As police chief in Miami, he supervised the recent police riots during the FTAA meeting. Timoney's name has periodically surfaced in the mainstream media in connection with Homeland Security, often rumored to be under consideration for a top lieutenancy under Ridge. The "economic terrorism" provisions of USA Patriot, arguably, apply to many of the direct action tactics used by the Wobblies and other radical unions; how long will it be before the "criminal syndicalism" laws of eighty years ago are resurrected under this guise?

An especially creative innovation from the War on Drugs, since applied to all sorts of other areas, is to turn everyone we deal with into a police agent. Banks routinely report "suspicious" movements of cash; under "know your customer" programs, retailers report purchases of items which can conceivably be used in combination to manufacture drugs; libraries come under pressure to report on readers of "subversive" material; DARE programs turn kids into police informers.

The media and popular culture also do their part. In the police drama, "'rights' are a joke, the accused are despicable sociopaths, and no criminal is ever brought to justice until some noble cop or prosecutor bends the rules a bit."⁴⁷ Meanwhile, the schools, through "peer group socialization" (aka the barracks society), DARE, and "zero tolerance," are molding a public trained from childhood to believe that the way to success is to please authority figures, to avoid making waves, and to do and believe what they are told--and that every problem or perplexing situation should be dealt with by running to someone in authority.

Computer technology and digital media have increased the potential for surveillance to Orwellian levels. The existence of enormous computer databases, surveillance programs like Echelon and Carnivore, and police experimentation with combinations of public cameras, digital face-recognition technology, and databases of digital photos, have between them made a total surveillance state technically feasible. Although trial balloons like Total Information Awareness are occasionally floated, the public still resists final steps toward a universal surveillance database or a national ID card. No doubt Ashcroft already has the draft legislation to implement them handy in his desk drawer, to be produced after the next convenient terror attack restores the properly attitude of servility among the general public.

A common response to those fearing such capability (from the sort of "small government conservative" who is typically full of zeal for the national security state), is to challenge civil libertarians to produce "one example" of how (for example) the USA Patriot Act has been abused. But the powers the government has on paper, and what it could choose to do with them if it ever found it "convenient," are a lot more important than the use it has made of them so far. All the rights we have were originally forced on the government from below, not granted by the government out of good will. The only guarantee we have for these rights, in the last resort, is our ability to exercise them against the will of the government, and our ability to resist if it attempts to restrict them.

The "slippery slope" argument used against gun control is just as applicable here: the more the exercise of a right is regulated, licensed and monitored, the less credible is the public's ability to exercise that right against the will of the government, and the more that right becomes in practice a privilege granted by the government. The federal government has gone a long way to creating the full legal and institutional structure necessary for dictatorship, regardless of whether they choose to exercise it; Ashcroft clearly desires to go most of the rest of the way down that path. The very fact that the government is busily acquiring the ability to track us, and to keep our speech and associations under surveillance, and to suspend them at the stroke of a president's pen, makes those liberties less secure. The effect is to render those liberties a grant from the government, depending on the continuance of its good will.

There are, however, built in limits to these tendencies toward repression and statism; they lie in the potential for legitimation crisis detailed in the previous section. Many aspects of the neoliberal reaction itself, like the politically charged debate over "welfare reform," are examples of the contradictions of capitalism being translated to the administrative realm, as Habermas predicted.

Even in periods of accumulation crisis and stagnation, like the 1970s, capital is so over-accumulated that industry cannot dispose of its product profitably in a free market, operating at full capacity. Over-accumulation is the underlying and most fundamental crisis tendency at all times.

As we have seen, paradoxically, one solution to the crisis of over-accumulation is even more accumulation to increase the profitability of old investments. The term "accumulation crisis" refers, not to absolute levels of capital accumulation, but to insufficient rates of additional accumulation to make make old investments profitable. But this "solution," while staving off disaster in the short run, further exacerbates the long-term problem of over-accumulation, which requires in turn still greater accumulation in the future to keep today's investments profitable. The system becomes ever more over-accumulated, and dependent on greater and greater levels of future accumulation.

Since over-accumulation is chronic and fundamental, even in periods of accumulation crisis, there are limits to the feasibility of neoliberal reaction. The state can only reverse the social and economic gains of labor to a limited extent. So despite the neoliberal hat-tipping to the glories of "free market capitalism," the reaction of the 1970s was not toward less state involvement in the economy. It was only toward less state support for aggregate demand and less accommodation with organized labor. And even so, it was not feasible to reduce the bargaining power of labor to pre-New Deal levels, because it was necessary, in remedying the problems of under-accumulation, to avoid provoking a new crisis of realization.

Thus, the state capitalist system is balanced on the edge of a knife. There is permanent tension between the requirements for realization and full output, and for further accumulation; or, as James O'Connor put it, "economic (and social and political) contradictions between conditions of value and surplus value production, on the one hand, and effective demand and value realization, on the other."⁴⁸ Corporate liberal solutions to the crisis of over-accumulation impede the further accumulation necessary to make existing investments profitable. But the neoliberal shift of consumption funds to investment threatens the aggregate demand necessary to absorb output at full capacity, and threatens to make active the tendency toward over-accumulation which is always latent in the state capitalist system.

In this state of ongoing tension, something has to give. One way out is severe recession or depression which, by radically devaluing existing accumulations of capital, increases the ratio of surplus value to constant capital and thus restores a healthy rate of profit. After the massive destruction of capital values in depression, those who come out on top are in the position to start a new wave of accumulation. For the capitalists who survive, it is a "solution"; but from the point of view of the capitalist class as a whole, it is a catastrophic one, not to mention dangerous and politically costly. An economic system that "solves" the tension between accumulation and realization by increasingly severe swings of the business cycle sounds dangerously close to the late capitalism predicted by Marx.

The fiscal crisis of the state is also chronic. No matter how much the welfare state is retrenched and unions are emasculated, the economy requires increasing government inputs to render capital profitable. Even during periods of accumulation crisis like the 1970s, capital is nevertheless over-accumulated to the point of being unprofitable without massive state intervention. But such state expenditures, by reducing the pool of private funds available for private investment, also intensify the tendency toward accumulation crisis.

The corporate economy, at its present levels of accumulation and centralization, is simply incapable of operating at full capacity and disposing of its full product without massive state inputs and massive state involvement in the economy. And such interventions, by their very nature, destabilize the corporate economy in such a way as to require still further intervention. As a result, to the danger of accumulation and fiscal crisis is inherent in even the minimal forms of state intervention, which are themselves absolutely necessary to prevent the primary crisis tendency of over-accumulation and under-consumption. It is impossible to stave off accumulation and realization crises without levels of consumption and state spending that imperil adequate levels of new accumulation. And any shift in resources from consumption to investment sufficient to secure adequate levels of new accumulation will threaten the level of demand necessary to absorb the output of industry operating at full capacity. It is virtually impossible to steer a middle course between the two crisis tendencies.

It might not be altogether fanciful to discern in the history of the past hundred years a long-term political cycle of state intervention in the economy: an oscillating political business cycle of alternating reactions to the crises of over-accumulation and under-accumulation. O'Connor seemed to be hinting at such a political cycle when he wrote that "historical crisis created large-scale capital and the working class/salariat, which created social democratic state forms and contents--all of which were at the root of the modern accumulation crisis."⁴⁹

The neoliberal reaction of the 1970s, and the subsequent polarization of wealth and income, arguably created new crisis tendencies toward over-accumulation. The impending crisis was concealed in the 1990s by the largely state-created high tech industry. This new industry staved off a new crisis of over-accumulation by providing a large and profitable outlet for surplus capital: a long-wave investment cycle comparable to the auto industry in mid-century. Still, the polarization of income and the channeling of all productivity increases into further investment foreshadowed a new crisis of overproduction and under-consumption.

Richard K. Moore's recent speculations on a quiet anti-neoconservative "coup" currently in progress are quite interesting in this context. Moore suspects, behind the war of a thousand cuts from leaks on the Plame scandal, Abu Ghraib, etc., a movement on the part of the uniformed military and CIA and State Department careerists (not to mention much of the corporate establishment) to remove the Bush clique from power.⁵⁰ I myself wonder whether the U.S. policy establishment is reassessing, not only the PNAC foreign policy agenda, but the neoliberal consensus itself. Is there a long-term policy shift in the works, comparable to that of the early '70s--but this time back toward corporate liberalism? It would be interesting, in this regard, to see Thomas Ferguson’s assessment of the flow of corporate money to the respective parties.

As James O'Connor argued, the individualist ideology is a key part of the accumulation crisis. In its modern form of consumerist individualism (the "revolution of rising expectations"), it increases pressure for higher wages and social spending. Consumerist individualism is at the heart of the legitimizing system of the Taylorist/Fordist social compact of the New Deal. "If they pay us well, we'll let the bosses manage." The worker sacrifices creative work as an expression of individuality, and instead finds his individuality by "pursuing happiness" in the realm of consumption.

More importantly, the older political individualism surviving from the traditional American political culture is an impediment to the authoritarian transformation necessary to transfer resources from consumption to accumulation, and to end excessive demands and democratic pressure on the state. The individualist values of the general population are at the heart of the crisis of legitimacy that limits state action on behalf of organized capital.

The authoritarian ideology of neo-conservatism ("big government conservatism," "national greatness conservatism") is a partial attempt to overcome the traditional American individualism. In place of the inalienable rights of the individual, and the absolute accountability of the state to the citizenry, it emphasizes service and sacrifice to the state. For example, consider Max Boot’s lamentation over the easy victory in Operation Enduring Freedom in November 2001, and the inadequate level of casualties for demonstrating the proper martial spirit. Although neoconservatives speak a great deal about "freedom" and "liberty," in the neocon lexicon freedom and liberty are redefined as whatever the individual is asked to sacrifice for. Whatever total war the state is currently fighting is, by definition, to "defend our freedom."

There are, however, built-in contradictions in the neoconservative solution. The concepts of liberty and justice have some residual cultural content that is beyond the ability of court intellectuals to extirpate. Transforming culture and rewriting history are not as easy as Orwell made them out to be. Indeed, neoconservatism appeals to the traditional values and legitimizing symbols of Norman Rockwell America, seeking to graft them onto the new ideology. Neoconservatism frequently appeals to populist values and resentment of elites and parasites, although the targets are carefully chosen (academics, welfare moms, "union bosses," "trial lawyers," etc.) so as not to pose any danger to the real system of power. It is doubtful that the public would swallow the new, authoritarian content of neoconservatism at all, were it not sugar-coated with older populist rhetoric.

There are inherent self-contradictions in neoconservatism, to the extent that its authoritarian strains cannot be adapted to even a heavily redacted version of older American values. Neoconservatism, like older strains of conservatism more genuinely in the American tradition, engages in frequent hat-tipping toward small government, strengthening "civil society," etc. In the 2000 election, Dick Cheney frequently stated that "government never made anyone wealthy" (stadium socialism and the camp followers at Halliburton KBR notwithstanding). The most sycophantic shills for the total warfare state and the domestic police state, like Ann Coulter, pepper their rhetoric with Tenth Amendment appeals for restoring the autonomy of states and localities, and denunciations of government elites' interference with families.

The task is made still harder to the extent that the ideas of justice and fairness have some real content. Neoconservative propaganda cannot invent new values; it can only misdirect existing values to selected targets by distorting or concealing factual evidence. But to the extent that all propaganda must appeal to true values, the audience can isolate those values from the propaganda message and direct the principles to new and more appropriate targets much closer to where the real elites live. To the extent that "elitism" and "parasitism" have real content, there is always a danger that the public will perceive the contradiction between practice and preaching, and decide that the terms can be more appropriately applied to the real power elite. Once the standards of "justice" and "fairness" are used as a propaganda weapon, those weapons may be turned against their previous holders. The populist and libertarian language used against selected academic and welfare-state "elites" possesses objective value content, and appeals to universal norms of fairness; when elite action in other areas of policy violate these objective standards of fairness, the danger is that the public will perceive the opportunistic choice of "elite" targets as inappropriate. The popular term "corporate welfare" is just one example of this.

And the situation is also complicated by the fact that the ruling elite will never be as internally cohesive as Orwell's Inner Party. The state may be the executive committee of the ruling class; but the ruling class has many factions (e.g., the disputes between labor-intensive and capital-intensive industry, domestic- and export-oriented industry, etc., that were at the heart of party alignments in the 20th century). No matter how much one faction of the business elite tries to redefine traditional American values and to suppress their old content, the other faction will have an interest in reinfusing its old value-content and using it as a weapon against their enemies in the elite.

One apparent solution is to remove more and more of the cost side of the ledger from the market altogether, with the taxpayers absorbing operating costs and rendering capital more profitable. The overall process, behind the state's oscillating policies of responding to over- and under-accumulation, is a greater and greater involvement, and the movement of ever larger portions of the economy from the realm of the market to the realm of state administration.

Theoretically, there is no limit. The state can continue to solve crises of over- and under-accumulation by shifting costs and revenues from the market to the political sphere indefinitely, until the final result is a privately owned corporate economy in the same position relative to the working and taxpaying population as the ruling class in the Asiatic mode. The role of commodity exchange and realization in the market will steadily decline until the capitalists are the state, and the economy is a single giant, slave-operated latifundium. Owners of the corporate economy operate directly through the state, as in feudalism or Asiatic mode, to exploit population at large through entirely political means.

Some members of the Frankfurt school saw fascism as an attempt to do just that. According to Horkheimer and Adorno, Neumann, and Pollock, Nazism reflected an evolution in which capitalists increasingly acted through the state. They speculated that such a society might, in future, altogether abandon commodity production and the law of value. At some point, in that scenario, the market would be superseded by state administration, and the capitalists would extract a surplus from labor directly through the state. When that point was reached, the market would have been completely transformed into a state-owned and state-managed economy, and the capitalists would no longer be capitalists. Instead, they would be owners of the state economy by virtue of their control of the state.

Frederick Pollock described this phenomenon as the disappearance, with "the autonomous market," of the "so-called economic laws": "The replacement of the economic means by the political means as the last guarantee for the reproduction of economic life changes the character of the whole historical period. It signifies the transition from a predominantly economic to an essentially political era."⁵¹

Unfortunately for the capitalist ruling class, this possibility is largely theoretical. The stability of all government rests, in the last resort, on public consent. And while the degree to which public opinion can be shaped by the ideological hegemony of a ruling class is indeed remarkable, there are limits in practice to the ability of legitimizing ideology to achieve popular acquiescence.

There are also absolute physical limits. Crises of inputs like transportation and energy would, in all likelihood, be even more acute under post-capitalism. Allocating them entirely by political means, instead of only partially, would simply remove the rationalizing function of market prices altogether. The example of the Soviet economy is instructive. It largely removed the law of value as a consideration in allocating inputs to the economy. Nevertheless, the inherent irrationalities resulting from ignoring the law of value led to ever greater wastage of inputs, and to ever greater inputs to achieve the same results. The state planners had no way of even knowing how many resources they were wasting, because there was no basis for rational economic calculation. The final result was collapse.

Finally, there are political constraints from outside. Even in the event of the post-capitalist class society feared by the Frankfurt School, such a system would surely reach physical limits of expansion short of total military and political control of the planet. Had Nazi Germany succeeded in defeating the Allies militarily and pushing Soviet forces out of European Russia, it is still unlikely that Hitler would have been able to maintain permanent control of subject populations from the English Channel to the Urals. It is still less likely that a post-capitalist America and its developed world allies, regardless of their degree of military and technical superiority, could hold on to the entire world.

And despite Orwell's cynicism, it is unlikely that America's fellow nuclear powers would act as enablers of global empire, or that the great powers would undertake a tacit obligation not to challenge each others fundamental interests. It is much more likely that the major nuclear powers, Russia and China, would promote their own interests by challenging American/Western dominion, and encouraging defection and insurgency in the Third World.

What’s more, Orwell's speculation on the motives of the Inner Party in Oceania is psychologically incredible. It is unlikely if nothing else that any ruling class would be able to maintain the internal cohesion and morale to behave with the ruthlessness necessary, in the long run, to control a hostile world. While the ruling elite no doubt attracts more than its share of sociopaths, ruling classes as a whole cannot maintain stable rule with no legitimizing ideology besides conscious self-interest or the love of power for its own sake.

H. Global Political Crisis of Imperialism

To some extent, as we saw above, a neoliberal policy in the Third World is a solution to both the accumulation crisis and excess of democracy in the First World. The class struggle is transferred from the First to the Third World, and the Third World is used as a base of attack on first. Transnational corporations write off old investments in the First World, use decaying industry there as a cash cow to support new and more profitable investment in the Third World.

As with other aspects of the neoliberal reaction, however, there are built in limits. Neoliberal policies in the Third World contain the seeds of a global political crisis. This is almost certain to be an acute crisis in the medium term. But even in the short term, the dangers to the global capitalist order are very real.

At some point, the effects of neoliberalism (and especially the jacked-up version of the Uruguay Round) are likely to cause political unrest in so many countries of the Third World, and the emergence of so many more populist or national figures like Chavez and Lula, that a coordinated movement among several such countries will emerge.

If several significant TW countries staged a surprise, coordinated repudiation of their national debts, and withdrew from the Bretton Woods agencies, the effects on the neoliberal system would be devastating.

It's interesting that we've seen a near-collapse of central power in Argentina, with the emergence of a variety of grass-roots economic and political organs of self-government; and anti-neoliberal populist regimes in Brazil and Venezuela--all in just a couple years' time. As the impacts of the Uruguay Round and other neoliberal policies make themselves felt in the Third and Fourth world, with the resulting political unrest and emergence of populist and nationalist movements, we can expect more and more such defections. At some point, such countries are likely to stop negotiating with the IMF individually, and attempt a joint action of some kind.

Imagine if several significant Third World countries made such a coordinated withdrawal from the Bretton Woods institutions, and repudiated their international debts. They could combine this with other genuinely free market reforms, like abrogating the intellectual property and industrial property provisions of GATT, so that native-owned competition might emerge to Western corporations, and be allowed to adopt modern production technology without restraint. If the domestic power of feudal oligarchies was broken in these countries, and with it their collusion with Western agribusiness, the land could be deeded to the actual peasant cultivators or agricultural laborers. A number of countries might enter into an accord to legalize mutual banks, LETS, and all other voluntary credit or money systems--and possibly organize a state asset-backed currency of some sort for trade between themselves, as an alternative to dependence on the dollar. They might announce a policy, finally, of ceasing to subsidize from state revenues the infrastructure projects on which Western capital depended to be profitable in their countries: that would mean all electricity, transportation, etc., services would be paid for by western firms on a cost basis. Rather than "privatizing" state enterprises by auctioning them off to kleptocrats and TNCs, they might transform them into either producers' or consumers' cooperatives--at least as genuine a form of privatization as the looting commonly practiced, but one that never seems to be adopted in Jeffrey Sachs' version of "free market" reform.

If this seems overly fanciful, consider Brazil's recent proposal for a free trade area among the G-20 group of developing nations--without the imprimatur of the Usual Suspects. The purpose, said Brazil's president, was "to fully exploit the potential among us, which does not depend on the concessions of the rich countries...."⁵²

Such a movement might even coordinate with the OPEC countries or China in adopting the Euro as a medium for international trade--the equivalent of a monetary atom bomb on the U.S.

If any one country undertook such measures, the CIA would probably begin immediate destabilization attempts, as it did with Allende's Chile or Chavez's Venezuela; but if several countries made such a withdrawal from the world corporate system simultaneously, pledged each other mutual support, and appealed for support to the people of the rest of the world, it might be more than the U.S. could handle. This latter would include mobilizing popular discontent against non-supportive regimes throughout the Third and Fourth worlds, promoting defaults and withdrawals by even more countries, and radical opposition within the core of the Empire itself.

With the serious political divisions between international capital, such a movement might even attract the support of a great power rival to the U.S. The Europeans, Russians or Chinese would be quite likely to ignore any U.S. attempt to impose trade sanctions. Any would-be rival "Eurasian bloc" of such powers might, indeed, welcome the movement as a form of strategic leverage, the same way the USSR welcomed the old nonaligned movement.

1. James O’Connor, Accumulation Crisis (Oxford: Basil Blackwell Ltd, 1984) 97.

2. Ibid. 8.

3. See material from James O’Connor, The Fiscal Crisis of the State (New York: St. Martin’s Press, 1973),in Chapter Six above.

4. O’Connor, Fiscal Crisis 8.

5. "Head to Head: M6 Toll Road," BBC News, December 9, 2003 http://news.bbc.co.uk/2/hi/uk_news/3303629.stm Captured December 10, 2003

6. "World Oil Supplies Running Out Faster than Expected," Oil and Gas Journal, August 12, 2002. See also George Monbiot, "Bottom of the Barrel," the Guardian, 2nd December 2003 http://www.monbiot.com/ ; Colin J. Campbell and Jean H. Laherrère, "The End of Cheap Oil," Scientific American, March 1998. http://news.bbc.co.uk/1/hi/business/3777413.stm Captured May 15, 2004.

7. Warren Johnson, Muddling Toward Frugality (San Francisco: Sierra Club Books, 1978).

8. Ivan Illich, Tools for Conviviality (New York: Harper & Row, 1973).

9. Kaveh Pourvand, private email, October 29, 2003.

10. O’Connor, Fiscal Crisis of the State 9.

11. Jürgen Habermas, Legitimation Crisis. Trans. by Thomas McCarthy (United Kingdom: Polity Press, 1973, 1976) 61, 68.

12. Robert Shea and Robert Anton Wilson, The Illuminatus! Trilogy (New York: Dell Publishing Co., Inc., 1975) 388.

13. Ibid. 498.

14. Paul Goodman, Like a Conquered Province (New York: Vintage Books, 1965) 357 (published under single cover with People or Personnel).

15. Paul Goodman, People or Personnel (New York: Vintage Books, 1963) 83-4 (published under single cover with Like a Conquered Province).

16. Ibid. 113.

17. Ursula LeGuin, The Dispossessed (New York: Harper Paperbacks, 1974) 305-6.

18. Paul Goodman, The Community of Scholars (New York: Vintage Books, 1964) 213 (published under single cover with Compulsory Miseducation).

19. Goodman, People or Personnel 70.

20. Habermas, Legitimation Crisis 36.

21. Ibid. 68.

22. Ibid. 81.

23. Richard K. Moore, "Escaping the Matrix," Whole Earth (Summer 2000) 53.

24. Samuel P. Huntington, Michael J. Crozier, Joji Watanuki. The Crisis of Democracy. Report on the Governability of Democracies to the Trilateral Commission: Triangle Paper 8 (New York: New York University Press, 1975).105-6.

25. Ibid. 92.

26. Ibid. 7-8.

27. Ibid. 113-5.

28. Ibid. 7-8.

29. Ibid. 74-6.

30. Ibid. 113-5.

31. Frank Morales, "U.S. Military Civil Disturbance Planning: The War at Home" Covert Action Quarterly 69, Spring-Summer 2000, http://infowar.net/warathome/warathome.html Captured April 15, 2001. The last quote is from Donald Goldberg and Indy Badhwar, "Blueprint for Tyranny," Penthouse Magazine August 1985.

32. Harry C. Boyte, The Backyard Revolution: Understanding the New Citizen Movement (Philadelphia: Temple University Press, 1980) 226n.

33. Ibid. 13-6, along with notes on 225-9.

34. Ibid. 225-6n.

35. David M. Gordon. Fat and Mean: The Corporate Squeeze of Working Americans and the Myth of Management Downsizing (New York: The Free Press, 1996).

36. Guy Pauker, Military Implications of a Possible World Order Crisis in the 1980s R-2003-AF (Santa Monica: Rand Corporation, November 1977); Pauker, Sources of Instability in Developing Countries P-5029 (Santa Monica: Rand Corporation, June 1973).

37. O’Connor, Accumulation Crisis 1-2.

38. Moore, "Escaping the Matrix" 56.

39. Ibid. 57; See also Sam Smith, "How You Became the Enemy,” (Progressive Review 1997). http://www.mega.nu:8080/ampp/enemy.html captured April 15, 2001.

40. Diane Cecilia Weber, "Warrior Cops: The Ominous Growth of Paramilitarism in American Police Departments" Cato Briefing Paper No. 50, 26 August 1999. http://www.cato.org/pubs/briefs/bp-050es.html Captured April 15, 2001.

41. Alfonso Chardy, "Reagan Aides and the 'Secret' Government" Miami Herald 5 July 1987 http://www.totse.com/en/conspiracy/the_new_world_order/scrtgovt.html Captured April 15, 2001; see also Diana Reynolds, "The Rise of the National Security State: FEMA and the NSC" Covert Action Information Bulletin #33 (Winter 1990). Reproduced by The Public Eye http://publiceye.org/liberty/fema/Fema_1.htm Captured April 15, 2001.

43. "US Army Intel Units Spying on Activists" Intelligence Newsletter #381 (April 5, 2000) http://www.infoshop.org/news5/army_intel.html captured March 27, 2001.

44. Jim Redden, "Police State Targets the Left" The Zoh Show: Newsbytes (May 2, 2000) http://www.zohshow.com/News/Newsbytes/tidbits050200b.htm Captured March 25, 2001; Jim Redden, Snitch Culture: How Citizens are Turned into the Eyes and Ears of the State (Venice, Calif.: Feral House, 2000).

45. See Rosenberg, The Empire Strikes Back.

46. Ibid.

47. Moore, "Escaping the Matrix" 57.

48. O’Connor, Accumulation Crisis 58.

49. Ibid. 225.

50. RKM, "about those torture photos…" Cyberjournal, May 19, 2004. http://cyberjournal.org/cj/show_archives/?id='811'&batch='16'&lists='cj' Captured August 8, 2004. Richard K. Moore invites comments on these views; he can be reached by email at richard@cyberjournal.org

51. Pollock, "State Capitalism," Studies in Philosophy and Social Science, IX, No. 3 (1941); Franz Neumann, Behemoth (1942); Adorno and Horkheimer, Dialectic of Enlightenment (1944). All cited in Michael Harrington, The Twilight of Capitalism (Simon and Schuster, 1976) 216-18.

52. "Brazil proposes creation of G-20 free trade area," December 13, 2003 www.chinaview.cn 2003-12-13 11:13:39 http://news.xinhuanet.com/english/2003-12/13/content_1229296.htm Captured December 14, 2003.