My denunciation in July of the Iranian reformists' zeal for privatization and deregulation elicited mail from readers who asked just what was wrong with setting people free from state tyranny. I did not expect to have to explain this when the chief economist of the Clinton White House (and later of the World Bank), Joseph Stiglitz, has eloquently addressed the question. With the recent revelations that Wal Mart single-handedly hinders as many women as any religious tyrant could, I thought I needed say no more.
But a published study (the latest in a string of dozens over the years) that generally correlates reckless behavior with the lack of proper education convinced me to add my two cents worth. Such studies are often used to imply that the wild herd that is the electorate needs to be tamed in a democracy, as the famed philosopher Walter Lippman recommended. The two topics – the dangerous hordes and the urgency for emasculated government in Iran — are intimately linked. Linked, that is, in the writings of frustrated Iranian dissidents as they explain why the masses fail to appreciate market-based “progress” and “individualism.”
Survey after survey in co-called emerging democracies of Eastern Europe, Latin America and elsewhere have shown a pronounced disconnect between the professional class and the rest: the economically less secure majorities fail to see the widely heralded improvements in those lands. Wait just a minute, was democracy not supposed to restore the rights of the vulnerable class first and foremost? Were the interests of the more affluent not already pretty secure without democracy ?
In a nutshell, the problem is that aggression and freedom are defined too narrowly by folks who benefit from the silent violence in “free market” democracy. With the Pentagon and the CIA having as much brain power per square foot as any top-notch university, it is easy to see that the greatest purveyors of violence worldwide are highly educated. Universities, too, are depended upon by the global enforcers for the nonstop R&D that supplies ever better killing machines (aka “defense technologies”).
One could further point out that the high priests of the freedom-from-government temple (markets) have created in the United States the largest prison population per capita in the world, according to undisputed official figures. Or note that the retirement funds of the professional class, invested in the stock market, keep Lockheed Martin and Northrop Grumman in the business of what is euphemistically termed “mission accomplishment.” So much for the myth that enlightened class cuts down the public sector in order to empower the individual.
But there are also less obvious forms of mass violence daily that we are not accustomed to noticing (third world debt was highlighted this summer as one). These are the direct result of privatization and deregulation, otherwise known as neo-liberal policy.
You see, we have been conditioned to think that tyranny can come only from government. That is the intellectual pedigree that connects us to the pioneers of the Age of Enlightenment, courtesy of an education system dependent on corporate America. In this worldview, a system is in need of reform only if a mechanism other than price decides how personal status is assigned and goods and services are allocated. Hence the open hostility our Iranian intellectuals express routinely towards tribal, hereditary, and gender-based social systems. But the market is rational, we are led to believe.
We are thus distracted from the tyranny of the unelected “free market” behemoths, whose decisions about everyone's employment, housing, health, and education are made behind closed boardroom doors. That's why it does not seem odd that aid to poor countries is administered by corporate contractors of the donor nations in order to bypass “corrupt” local politicians! It is also why the alliance of multinational companies and Live8 concerts this summer to push G8 governments to “Make Poverty History” raised few eyebrows.
For historical reasons, we Iranians are extra likely to find fault only in the public sector. American style coercion, in which governments at all levels serve the moneyed class by cutting taxes and shrinking public services, impresses too many of us as freedom. But when government thus abandons people, corporations that exist to sell what everyone needs to the highest bidder fill the void with minimum oversight.
There is even less transparency in corporacracy than in government, but that is rarely recognized as tyranny. Lately, with the Republican Party in control of all three branches of the US government, the Christian Right also rushes in to compensate for the derelict public sector. These processes are on full display after Hurricane Katrina along the Gulf coast of Mississippi and Louisiana.
Cutting taxes is the main instrument by which bloodless violence is perpetrated in this system. ( In the Iranian version, our reformists have, with encouragement from the brave journalist Akbar Ganji, pushed hard to dismantle public subsidies and other welfare state programs.) I think I can best illustrate this with an example from the business that I am most familiar with in America, the housing sector.
The Clinton Administration, with bipartisan help from Congress, reduced fourfold the capital gains tax American families paid when they sold their homes (single homeowners were granted a less generous tax break). The legislation allowed homeowners to repeat such tax-free profit taking as often as every two years. At a cost of tens of billions of dollars to the national treasury, it would have been more democratic to forego this change in tax policy and spend the funds instead on a dramatic reduction in the cost of college education.
The tax break benefited homeowners across the board, but Americans with the most expensive homes (who least needed a boost) received the greatest share of the massive tax shelter. Occupants of rented homes got no break. Although low mortgage rates allowed a record number of Americans to become homeowners after the mid-1990s, the resulting boom in home prices put home ownership farther out of the reach of millions below and above the federal poverty line.
Thus, considering that homeownership is often a major step toward “the American dream,” some people's freedom from taxes erected a durable barrier to advancement for the rest. If Republican lawmakers now succeed in repealing the federal estate tax permanently, the resulting expansion in inherited wealth will make this barrier more rigid yet. (Two years ago, Business Week magazine drew on several census-based studies to show that the Fabulous Nineties failed miserably to halt the decline of class mobility in the United States.)
Deep as the gap between the haves and the have-nots is today in terms of home ownership, the resulting stratification in access to home equity loans can do worse damage to the next generation. One of the few painless ways for a family to finance a college education is to borrow against the rising market value of its home. In this age of unprecedented budget deficits at all levels of government, scholarships and government-subsidized loans have not kept up with college enrollment.
This is an example of how shrinking the government hurts the freedom of those who need freedom the most. Two statistics tell the story best: a college degree is still the surest booster of future income for average folks, and the cost of four years of higher education continues to rise much faster than the incomes of most working Americans. Tuition at public universities is not immune to this hyperinflation, as state allocations are slashed to meet “fiscal responsibility” requirements.
Knowing how freedom, narrowly defined, works against democracy helps us understand why individualism is not a popular cause among the working majority anywhere. People know that capitalism generates winners and losers, and they seek government protection from its excesses. Individualism and the free market sound good when you have reasonably secure access to the resources you need. It can feel like reckless abandonment if money rules and your wheel of fortune does not deliver.
To those who will say, well, this is better than what they have in Iran, let's remember that tuition at public universities there costs next to nothing. I fear this will change if Iran's reform parties rise to power, as they have made clear. In a report from Tehran in the The Nation magazine, Negar Azimi succeeds in conveying how Iranians of various backgrounds explain the trade-off between personal freedoms and other options.
To explore the segregation in American K-12 education caused by tax reductions, I recommend Eilene Zimmerman's great essay titled “Class Participation” in the October 2005 issue of Harper's magazine. You could also amaze yourself by learning that none of the pain I have described is necessary in in The Washington Post.