Oligarchy In The Americas: Comparing Oligarchic Rule In Latin America And The United States [1st Edition] 3030631451, 9783030631451, 9783030631468

Table of contents :
Preface......Page 6
Acknowledgements......Page 9
Contents......Page 11
Part I Modes of Oligarchic Rule in Latin America......Page 12
The Terms of the Comparison Between Latin America and the United States......Page 13
The Argument......Page 19
References......Page 24
2 Oligarchic Rule and the Patrimonial State......Page 25
Conceptualizing Oligarchic Rule......Page 26
Democratic Theory and Oligarchic Rule......Page 31
The Popular Response......Page 34
References......Page 40
The Historical Context......Page 42
The Democratization of Oligarchic Rule......Page 45
Continuity and Change in Oligarchic Rule......Page 47
The Neoliberal Mode of Oligarchic Rule......Page 52
The Nature of Latin American Democracy......Page 57
References......Page 63
Part II Modes of Oligarchic Rule in the United States......Page 66
The Founding of the Oligarchic Republic......Page 67
Party-State Patrimonialism......Page 73
References......Page 80
The South and the Oligarchic Alliance......Page 83
State Intervention and the Collapse of the Alliance......Page 89
References......Page 97
6 Third Mode—Oligarchy Transformed, the Republic Reduced......Page 100
The Changing Character of the Oligarchy......Page 101
The Private Command of Public Policy......Page 105
References......Page 112
Part III Comparing Oligarchic Rule, South and North......Page 114
Comparing Polities, South and North......Page 115
Comparing Oligarchic Rule, South and North......Page 122
References......Page 130

Citation preview

Oligarchy in the Americas Comparing Oligarchic Rule in Latin America and the United States Joe Foweraker

Oligarchy in the Americas “This is an engaging and thoughtful book that addresses the most central issues in the study of contemporary politics and offers a new interpretation of the politics of the Americas that highlights the persistence of oligarchic power and patrimonialism. Joe Foweraker draws on his considerable knowledge of the Americas and his capacity for elaborating big ideas to push our thinking forward. There is no book quite like this in terms of topic and scope.” —Gerardo L. Munck, Professor of Political Science and International Relations, University of Southern California, USA “This book offers a bold and compelling effort to compare the politics of Latin America and the United States within a single theoretical framework, effectively challenging the claim to American exceptionalism and the superiority of its democracy. Foweraker draws evidence from major works on political development, past and present, to deliver a lucid interpretation of what ails democracy in the Americas, both North and South. His diagnosis demonstrates the power of his explanatory framework.” —Evelyne Huber, Morehead Alumni Professor of Political Science, University of North Carolina, USA “Is the USA developing into an exclusionary oligarchy resembling the longstanding pattern prevalent in Latin America? In this brilliantly iconoclastic book, Joe Foweraker provides convincing evidence that in the USA the tensions between the inclusivity that comes from democratic control and the exclusivity that is the hallmark of oligarchy have been moving inexorably in favour of the latter. As in Latin America, US democracy is often little more than a veneer overlaying exploitative oligarchic power.” —David McKay, Emeritus Professor of American Government, University of Essex, UK

Joe Foweraker

Oligarchy in the Americas Comparing Oligarchic Rule in Latin America and the United States

Joe Foweraker University of Oxford Oxford, UK

ISBN 978-3-030-63145-1 ISBN 978-3-030-63146-8 (eBook) https://doi.org/10.1007/978-3-030-63146-8 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Cover illustration: © Harvey Loake This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

To Dinah

Preface

It is not always easy to ascertain when the making of a book begins. In this instance, there are two strong candidates for the date of its genesis; and the only curious thing about that is that the two dates lie all of fifty years apart. It was in 1968 when I first arrived in the United States, where I have since spent some seven years or more of my working life. I was there courtesy of a Fulbright (English-speaking Union) Fellowship. It turned out to be an extraordinary year. By happenchance I was in Chicago at the time of the Democratic Party Convention and an incidental witness to a violent attack on the Yippies (the Youth International Party) by Mayor Richard Daley’s police force. Some little time later I met with George C. Wallace in his campaign office in Montgomery, Alabama. Much later—it was already late spring of 1969—I visited People’s Park in San Francisco, which was already long past the innocence of its moment of liberation. And there were many further adventures that have since raised a quizzical eye, or two, even from my nearest and dearest. But the point of the reminiscences is that the seed had been sown; and since that time my fascination with the politics of the United States has grown year on year. From San Francisco, I worked my way down to Mexico, where I travelled for some three months, a meandering journey that completely changed my view of things. On my return to the UK, I started to study at the Latin American Centre at the University of Oxford, where I had been offered a graduate scholarship; and just a few years later I took

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up my first tenure-track post as a lecturer in Latin American politics. Since the early 1970s, therefore, I have been researching in and writing on Latin America and Spain, while often working in the United States, across different universities and research centres. Only now, after so many years of a working life, have I finally been able to bring the two Americas together in a comparative argument about oligarchy and oligarchic rule. In May 2018, I convened a panel on ‘Oligarchy, Democracy, and the State in Latin America’ for the International Congress of the Latin American Studies Association in Barcelona. The panel members comprised Max Cameron, Agustina Giraudy, Gerardo Munck and Juan Pablo Luna. Conversations in the following days brought two ideas into focus. Juan Pablo encouraged the idea I had in mind to extend my inquiry into oligarchy in the modern world to the United States; while Max and I began our conversation about oligarchic rule in Latin America, in response to Gerardo’s exhortation that we seek ways to reconcile my argument about continuity with Max’s emphasis on change. At that time and in the subsequent months I was still working on these topics along two separate tracks; and it was only in the following year—again in conversation with Max at a conference in Ottawa where I had been invited to give the keynote address—that I glimpsed the exciting possibility of bringing the two tracks together. The intellectual incentive to do so was strong. Odd though it may seem, there is virtually no comparative politics of the Americas, some narrowly institutional studies aside. So, a broad-brush comparative argument about the two Americas might pay big analytical dividends, as well as creating a novel perspective on the politics of the United States; while a priority focus on oligarchy and oligarchic rule might move the analysis beyond the conventional tropes that have come to define studies of democracy in the Americas. I recognize that even the most sympathetic reader may well judge these to be rather ambitious aspirations for what is—after all—a rather short book. And a less sympathetic reader may feel entitled to ask whether this is the best I can do—after fifty years! But I reckon that even a small step can be worthwhile if it is a step in the right direction. The direction of travel here is from South to North, with the terms of the comparison between the two Americas set in Latin America, where the notion of oligarchy is familiar in academic discourse and the political vernacular alike. This may prove to be unsettling, possibly contentious, because it reverses the usual direction that tends to judge things Latin

PREFACE

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American according to criteria established in the United States. It may be too much to claim that it represents a paradigm shift, but it certainly presents a different way of viewing the political world of the Americas. Torquay, England Summer 2020

Joe Foweraker

Acknowledgements

Over the years, I have had recurrent opportunities to thank many friends and colleagues who have offered encouragement and support to my research and writing. On this occasion, this welcome task is made more challenging than ever by the long gestation of this book and the sheer number of debts to be paid. Here, I can do no more than mention just some of those who have done so much to sustain my working life, especially during the years spent in Latin America and the United States. But I remain very aware that the life of a peripatetic scholar depends more than most on the generous hospitality of our academic community worldwide, not to mention the countless random acts of kindness from strangers. In roughly alphabetical order I wish to thank Mohammed Agha, Ricardo Alves de Lima, Alan Angell, Christian Anglade, Priscilla Annamanthodo, Richmond Brown (RIP), Victor Bulmer-Thomas, Max Cameron, Richard Carwardine, Miguel Centeno, Susan Clarke, Wayne Cornelius, Ann Craig, Diane Davis, Clare Dekker, James Dunkerley, John Dussinger, Richard Fleming, Roger Goodman, Peter Gorevic, Keith Hanley, Glennon Harrison, Rebecca Harty, Neil Harvey, John Hodgson, David Howarth, Octavio Ianni (RIP), David Johnson, Alan Knight, Todd Landman, Mary Clare Lennon, Karen Levy, Elspeth Loades, Juan Pablo Luna, Al Matheny, David McKay, Rosemary Miserendino, Gerardo Munck, Gérard Neau, Bernard O’Donoghue, Sarah Parkin, Eduardo Posada Carbó, Tim Power, Jim Primm, Pamela Richards, Victoria Rodriguez, Ian Roxborough, Marianne Schmink, Peter Smith,

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ACKNOWLEDGEMENTS

Guido Soenens Bop, Al Stepan (RIP), Lynne Stephenson, Eric Tannenbaum (RIP), Dolores Trevizo, Katharina and Michael Turner, Peter Ward, Albert Weale, Luis Werneck Vianna, Laurence Whitehead, Phil Williams and Charles Wood. You will note that my co-author for Chapter 3 of this book is Max Cameron. For over two years, Max and I have been engaged in a conversation about oligarchy and oligarchic rule in Latin America that has immensely enriched my thinking on these topics; and this helped to shape my argument as I extended the inquiry to the United States. I owe special thanks to Max for his loyal commitment to the cause.

Contents

Part I

Modes of Oligarchic Rule in Latin America 3

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Oligarchic Rule in the Americas, South to North

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Oligarchic Rule and the Patrimonial State

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Part II

Modes of Oligarchic Rule in the United States

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First Mode—The Federal Patrimonial State

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5

Second Mode—Oligarchic Alliance and Party Politics

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Third Mode—Oligarchy Transformed, the Republic Reduced

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Part III 7

Comparing Oligarchic Rule, South and North

Polity in the Americas

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PART I

Modes of Oligarchic Rule in Latin America

CHAPTER 1

Oligarchic Rule in the Americas, South to North

Abstract This introductory chapter states the principal premises of the argument to follow, namely that oligarchic rule remains present and important even as democracy advances; and that oligarchic rule in Latin America and the United States can be addressed and compared in the same terms. It also claims that the political development of the Americas, North and South, are far more similar than commonly supposed, once the inquiry is focussed on the political conditions that render oligarchic rule compatible with democracy. The terms of the comparison between the two are set in Latin America, so driving the argument South to North and creating a novel perspective on the politics of the United States. These terms also serve to outline the parameters of a comparative politics of the Americas. The chapter also provides a brief synopsis of argument of the book, chapter by chapter. Keywords Oligarchy · Democracy · Latin America · United States · Development

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 J. Foweraker, Oligarchy in the Americas, https://doi.org/10.1007/978-3-030-63146-8_1

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The Terms of the Comparison Between Latin America and the United States To talk of oligarchy in the Americas is to talk of oligarchy in both Latin America and the United States of America. To talk of oligarchy at all is to recognize its presence in the politics of today. Thus, the idea of an American oligarchy entails a significant shift in perspective, in at least two respects, and requires two bold assumptions. First, it assumes that Latin America and the United States can be addressed and compared in the same terms. Second, it assumes that elements of oligarchic rule continue even as democracy advances. These assumptions tend to run against received wisdom and practice. On the one hand, there is the largely uncontested claim that the democracy of the United States is not only exceptional but also superior to others, especially in sharp contrast to those of Latin America; with the corollary that its modern political development has been entirely distinct from that of Latin America. If proof is needed, it lies in the dearth of a comparative politics of Latin America and the United States. On the other hand, democracy and oligarchy are thought to be politically incompatible, so that the advance of the one necessarily implies the retreat and eventual defeat of the other. Here it will be argued, to the contrary, that the political development of Latin America and the United States are far more similar than commonly supposed and that much of the similarity can be found in the continuity of oligarchic rule and the variable compatibility of oligarchic rule and democracy. In the original political theory of Aristotle, the notion of oligarchy may denote either the wealthy few or a system of rule, while democracy is the rule of the demos but not the demos itself. The simple presence of an oligarchy may therefore be thought to be compatible with democracy, where formal political equality sits alongside social and economic inequality. In contrast, there is a logical coherence to the claim that oligarchic rule and democracy are incompatible, insofar as democratic rule is designed to be inclusionary, while oligarchic rule is routinely exclusionary. There is little doubt therefore that their principles are contradictory, though it appears that their practice can be much less so; and Aristotle saw no impediment to ‘mixed’ systems and tended to favour the mix of oligarchy and democracy that he named ‘polity’ as constituting the best hope for ‘good government’ in conditions of inequality (Foweraker 2018, Chapter 5). Oligarchies change according to historical

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context and circumstance, but the focus here is on oligarchic rule and the conditions for its continuity and eventual compatibility with democracy. This compatibility is never complete and never goes uncontested, with processes of democratization often imagined as ongoing claims to the citizenship rights that together achieve both voice and recognition. It may be necessary to add that nothing in this study of oligarchic rule should be taken either to disparage democratic values and struggles or to demonize the presence of oligarchy. Indeed, it is a fully Aristotelian thought to ask whether a measure of oligarchic rule may be required for democracy in its modern manifestation to work at all. The notion of South to North indicates that the argument will be driven from Latin America to the United States, and so the terms of the eventual comparison of the two will be set in the South. Far from being a random, still less quixotic choice, there is a clear analytical advantage to proceeding in this direction because the presence of oligarchic rule is common political currency in Latin America, whereas it is relatively unfamiliar in the United States, and deriving the analytical terms of the inquiry from the study of Latin America will open up a new perspective on the politics of the United States. But the argument also travels South to North within Latin America, focussing on Argentina in the Southern Cone as the most appropriate context to demonstrate the importance of oligarchic alliances to the reproduction of oligarchic rule; and within the United States, where the states of the Confederacy have had such a huge influence both on the process of State formation and on the composition of the core oligarchic alliance of modern American politics. The process of State formation is central to the inquiry and will supply the key terms of the comparison between Latin America and the United States, as well as unlocking the puzzle of the eventual compatibility of oligarchic and democratic rule; while the reference to the American State simply adopts the native convention of referring to the United States as America, and its politics and much else as American. This is a convention that is adopted pari passu when talking about the United States. The strong claims for American exceptionalism and the superiority of American democracy, especially in relation to Latin America, are exemplified in Acemoglu and Robinson’s extensive survey of Why Nations Fail (Acemoglu and Robinson 2012), where the very first chapter— ‘So Close and Yet So Different’—highlights the differences between them to demonstrate the key analytical distinction between inclusive and extractive political institutions. In the nineteenth century, the United

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States was ‘more democratic politically than almost any other nation in the world’ and this also made it the most economically innovative nation in the world (Acemoglu and Robinson 2012, 33). This superior pattern of development depended on an effective rule of law, especially a secure regime of property rights, and inclusive political institutions that limited and distributed political power to prevent any particular interest in society from pushing government in an economically disastrous direction (Acemoglu and Robinson 2012, 43). Extractive political institutions on the other hand—and here the authors look to Latin America—place power in the hands of a narrow elite that promotes extractive economic institutions that concentrate wealth; and political conflict ensues to control the State in order to protect this wealth. This is a vicious circle that together with the ‘iron law of oligarchy’ creates a powerful tendency for extractive institutions to persist (Acemoglu and Robinson 2012, 123), and this explains why nations fail (Acemoglu and Robinson 2012, 372). In large degree this argument relies on the malleability of the two broad categories of inclusive and extractive institutions that are put to work in very diverse historical contexts and circumstances. But the takehome message is clear. No oligarchy can emerge or survive in the presence of inclusive institutions, but oligarchy will survive and flourish under extractive institutions; and this it is that differentiates the political and economic development of Latin America and the United States. But, as it is often said, the devil lies in the detail. Democracy in the United States was narrowly based, closely constrained and deeply imperfect in every respect in the nineteenth century (see Chapter 4); and though the regime of property rights was certainly more secure than in Latin America at the time (see Chapter 3), most of the capital value in property was held in the slave population. In this respect the Civil War could be interpreted as a massive assault on property rights, and this is precisely how Southern slaveowners understood it. Acemoglu and Robinson recognize that after the Civil War, southern landowning elites had managed to re-create the extractive and political institutions that had dominated the South before the Civil War (Acemoglu and Robinson 2012, 415), but confine the consequences to the negative impact on growth and prosperity in the South in the following years. What they fail to recognize is that the survival of oligarchic rule in the South had a huge influence on the subsequent process of State formation and on the oligarchic alliances that continued to constrain democratic advance (see Chapter 5).

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The State and variants of State formation have no place in their argument, which is why the distinction between extractive and inclusive institutions—vague as it often is—must do so much work. When the argument turns to Latin America it tends to focus above all on the persistence of extractive institutions and the failure to protect property rights, but the discussion of Argentina does contain the lineaments of a process of State formation in the description of how the preferences and the politics of the interior got embedded into Argentine institutions and ‘how the interior provinces, such as La Rioja, reached agreements with Buenos Aires’ (Acemoglu and Robinson 2012, 386). The story is a rudimentary sketch of what will be characterized as patrimonial State formation (see Chapter 2), where oligarchic interests and preferences are built into central State formation from the very beginning—as a condition of that process. The story clearly has a regional dimension and Argentina became a federal State, but, despite the cues, there is no recognition that the process of State formation in the United States of the nineteenth century is similar or at least analogous in important respects (see Chapter 4). Moreover, as the story moves to address the democratization of Latin American politics in recent decades it returns to the extractive regimes and the inequities they generate to explain why voters vote for politicians with extreme policies and why the newly democratic politics favours strongmen such as Perón and Chávez ‘who are just another facet of the iron law of oligarchy’ (Acemoglu and Robinson 2012, 387). This conclusion appears to underestimate the importance of democratic institutions to oligarchic rule in Latin America, just as the insistence on inclusive institutions ignores the role of oligarchic rule in the democratic politics of the United States. Acemoglu and Robinson drive their argument North to South, departing from a set of assumptions about the politics and institutions of the United States that appear anodyne but are in fact deeply contentious. Even as late as the 1990s the perception held that ‘oligarchies are a problem that other countries have’ (Johnson and Kwak 2011, 10), as an explosion of financial and economic crises on the periphery of the global economy—from Latin America to Russia to Southeast Asia—was seen to concentrate wealth and power in the hands of the favoured few. But the ‘otherness’ of those financial meltdowns was revealed to be pure illusion with the onset of the financial crisis of 2008: as the State moved to rescue the major banks, while letting the smaller banks fail by the dozens, it became only too obvious that this was a bailout of a ‘uniquely American

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oligarchy’ (Johnson and Kwak 2011, 28). It is true that the emergence of a powerful financial oligarchy has played a special role over the past one hundred years or more of oligarchic rule in the United States, but only in recent decades has this oligarchy risen to pre-eminence (see Chapter 6). Acerbic political debates about the banking system began in the early years of the republic (see Chapter 4), and political resistance to big money and State-chartered banks resulted in the huge growth of competitive banking in the United States of the nineteenth century, as described by Acemoglu and Robinson in contrast to the highly monopolistic system in Mexico at that time (Acemoglu and Robinson 2012, 33). The long historical arc from that golden age of competition to the bailout of a handful of banks that were deemed ‘too big to fail’ provides a metaphor for the survival and transformation of oligarchic rule in the United States of the modern era. These introductory remarks and the critical engagement with the argument of Why Nations Fail serve to identify the principal terms of the comparison between Latin America and the United States. These begin with oligarchy, oligarchic competition and alliance, oligarchic rule, and the conditions for the continuity of oligarchic rule, but also include changes in the character of the oligarchy and transformations of oligarchic rule itself. They also encompass property rights, the State, the process of State formation, and the specific nature and attributes of the patrimonial State; and last but not least they entail the terms of the variation in the compatibility of oligarchic rule with democratic regimes, covering— inter alia—the degrees of separation of the public and private spheres, and the myriad interactions of formal and informal rules (see Chapter 2). The conditions for the continuity of oligarchic rule, and the role of the patrimonial State in particular, will be understood as the modern form of oligarchic rule, while its transformation over time will be described in terms of the changes from one distinctive mode of oligarchic rule to another. This account identifies three distinct modes of oligarchic rule in both Latin America since Independence and the United States since the Founding. This cannot be pure happenchance insofar as these changes must certainly reflect major movements in the global economy in different degrees, but neither the modes themselves nor the timing of, reason for, or dynamics of the changes from one mode to another are necessarily the same across the two cases; and in all instances, it is the politics of the move from one mode to another that is foregrounded in the analysis.

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The headline claim is that the broad contours of the political development of Latin America and the United States are more similar than most would accept—but they are not the same. Thus the political economy of State formation, and the influence of labour-repressive systems in particular, is similar; but the specific impact of latifundia, indentured labour, forced seasonal migration and much else on the slow emergence of a central political authority in Latin America is not the same as the impact of the slave-holding South on the halting growth of the federal State in America, not least because of the Civil War and its aftermath (see Chapter 4). The character of the oligarchy, South and North, may be broadly similar in the early period but diverges substantially in later decades, while it is unlikely that any oligarchy in Latin America has ever resembled the financial oligarchy of contemporary America. The importance of oligarchic alliances to the reproduction of oligarchic rule and the accommodation with democratic regimes is similar; but, by and large, oligarchic alliances in Latin America are less secure and less stable than in the United States where one enduring alliance sustained the stability of its democratic politics for some eighty years—though that stability has been much reduced in recent years. The broad process of patrimonial State formation is similar, including the influence of oligarchic actors on its institutions and modus operandi, but the United States is distinctive in the enduring influence of one specific group of regional actors in the South on the national and federal State; and the process is also similar in the intricacies of public-private relations and formal-informal rules, but the United States is distinctive in the centrality and longevity of party-State patrimonialism (see Chapters 4 and 5), which has only pale reflections in Latin America in the specific experiences of Colombia, Uruguay, and— in a very different way—Mexico. Add to these summary observations the substantial variations in the influence of constitutionalism, republicanism and liberalism on political development South and North and it becomes clear that John Stuart Mill’s ‘method of similarity and difference’ is entirely appropriate for the inquiry. The terms of the comparison do not decide the empirical inferences that can be drawn from it.

The Argument This brief outline makes no attempt to replicate the argument of the book in an abbreviated or condensed form, but simply sets out to describe its main steps chapter by chapter—and so provide a guide to the direction

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of travel. The point of departure in Chapter 2 is a conceptual inquiry into the general conditions for the survival and continuity of oligarchic rule with a focus on the conditions of its compatibility with democratic government. In conventional terms, it provides a conceptual or analytical framework and so identifies the core concepts and analytical themes that will serve to structure the argument overall. But its true ambition is to deliver a comprehensive theory of oligarchic rule in the modern period. The key to the continuity of oligarchic rule is the formation of the patrimonial State, while the stability of this rule depends in part on oligarchic alliances that can sustain a coherent ruling coalition. Its variable compatibility with democratic government turns in large degree on the myriad combinations of formal and informal rules that cross the porous divide between the public power and private interests. Oligarchic and democratic rule are opposed in principle—the one exclusionary, the other inclusionary—and so there are always limits to their compatibility. But in practice they can coexist and combine, though not always very comfortably. Indeed, the tensions between the two can be recurrently expressed in populist challenges to oligarchic restrictions on democratic choice that may rotate the rulers but rarely advance the democratic agenda. The continuity of oligarchic rule does not imply fixity, and its reproduction can require and entail a change from one mode of rule to another, giving rise to distinctive modes of rule in different periods and different places. ‘Everything must change so everything can stay the same’. For Aristotle a mode of rule simply described the constitutional arrangements that served some interests and not others in deference to his quest for a mode of rule that responded not to narrow interests but those of the political community writ large. In this account a mode of rule describes the ensemble of institutions and practices, formal and informal, that are required to reproduce it, and Chapter 3 describes the successive modes of oligarchic rule in Latin America since Independence. There is an immediate difficulty in talking of Latin America as if it were one place rather than twenty distinct republics, and this is partially resolved by focussing on Argentina as an appropriate context for exploring the principal analytical themes of the argument. Argentina is not typical in any sense, but it constitutes a clear case of patrimonial State formation and illustrates the complexities of oligarchic competition and alliance. It also raises critical questions about transitions from one mode of rule to another. Nonetheless, the inquiry does seek to address the broad contours of oligarchic rule across Latin America as it moves from the oligarchic republics of the

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late nineteenth and early twentieth centuries to the partially democratic republics of the mid-twentieth century, to the current neoliberal mode of rule. The analysis of the latter is important to the subsequent claim (see Chapter 7) that the configuration of oligarchic rule, South and North, has been converging in significant ways over recent decades. The following three chapters are each dedicated to one of the three main modes of oligarchic rule in the United States, beginning in Chapter 4 with the founding of the oligarchic republic. This phrase may appear provocative, but it is quite clear that the founders were mainly preoccupied with effective government, not democratic government, and took whatever steps were deemed necessary to curb democratic aspirations. Consistent with this stance the first mode of oligarchic rule emerged from the narrowly oligarchic and strongly federal nature of the Constitution itself, especially the extensive scope accorded to states’ rights and powers in the initial absence of a federal administrative State. What was not foreseen in the Constitution was the growth of political parties and party patronage as the means of oligarchic manipulation of politics and policymaking in the localities. Together these tendencies led to a sui generis pattern of patrimonial party-State formation that promoted a combination of a constricted but competitive representative politics with the ruthless exclusion of poor whites, women, and racial minorities. The chapter then seeks to explain how and why—despite the evident threats— this mode of rule recuperated from the Civil War and Reconstruction, with special emphasis on the long legacy left by the survival of its core feature of private influence over public affairs and by the restoration of its exclusionary capacities. The principal markers of the long transition to the second mode of oligarchic rule were the huge accumulation of concentrated corporate power and the equally impressive increase in federal State intervention. Indeed, it was the rapid growth of big money, led by an aggressive financial oligarchy, that spurred the Progressive movement to demand federal government action to break up the monopolies and trusts to preserve the republic. The higher profile of the federal State was confirmed by the New Deal, but the haphazard expansion of a poorly coordinated State administration tended to replicate and reinforce the pattern of oligarchic incursion into the public sphere at the federal level, while federal policy itself was always diluted and refracted by the oligarchic control of the localities, especially in the South. These outcomes can only be explained by the politics of the transition, beginning with the Compromise of 1877

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that secured the South for the Dixiecrats and so prepared the ground for the national oligarchic alliance which underpinned oligarchic rule until the 1960s. As Chapter 5 explains, this alliance was articulated by party cooperation and deal-making in the Congress, thereby extending the modus operandi of party-State patrimonialism into the federal State: the Compromise had been a notoriously informal deal and its legacy was a pervasive informality in the conduct of federal government that was critical to the second mode of oligarchic rule. This mode of rule began to disintegrate in the 1960s when the late democratization of the United States, principally the Civil Rights and Voting Acts of 1964 and 1965, broke the oligarchic alliance that underpinned it. The political tumult of the 1960s and 1970s ushered in a period of rapid reorganization of oligarchic rule alongside multiple realignments in the party-political arena. The principal outcome was the federal government’s retreat from market regulation, beginning before but usually described as the Reagan Revolution. A consistent pattern of the privatization of the provision of public goods and increasingly regressive taxation led to unprecedented extremes of economic and social inequality, as measured both by income and wealth, that combined with the financialization of the economy and the growth and dynamism of the financial sector to construct a new mode of oligarchic rule. The high returns to capital and the super-rents deriving from market power and monopolies created a new financial oligarchy and a step-change in the private command of public policy. Chapter 6 explains how the megabanks at the centre of this story both precipitated the financial crisis of 2008–2009 and escaped the consequences by retaining their profits while socializing their losses. The winners were the financial oligarchy, big business and the political class that serves their interests. The losers were the poor and most of the amorphous middle class. The results were a significant shift in the balance of power away from the democratic government and towards a largely unaccountable oligarchy, and a high degree of social and economic exclusion that effectively split the republic into ‘two nations’. Chapter 7 picks up Aristotle’s notion of the mixture of oligarchic and democratic rule in a ‘polity’ and adapts it for the modern period as a prelude to the comparison of the composition of polity, North and South. Such a comparison cannot be static because of the oscillation between periods of drift and oligarchic ascendance and periods of democratic renewal and reform, a seesaw that occurs within the ambit of polity. Aristotle’s design for polity was concerned above all with the

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good government that advances the ‘good life’ and the flourishing of the community overall, but the current composition of polity both North and South does not recognize this as the proper purpose of government, while the current mode of oligarchic rule severely inhibits any democratic contestation except populist mobilization. The chapter then distils the lessons of Chapters 2 through 6 to compare oligarchic rule North and South across all available criteria and categories, including the timing of the transitions from one mode of such rule to another and the principal political contents of the distinct modes of rule themselves. Possibly the most significant conclusion to be drawn from this comparative analysis is the remarkable convergence between North and South in recent decades in both the composition of the polity and the mode of oligarchic rule alike. This argument represents a first essay in a comparative politics of the Americas, South and North. The course of the argument follows the strategic choice to begin at the beginning with what was there at the beginning, namely oligarchic rule. Self-evidently this was also a choice not to begin with democracy and therefore not to engage directly with the many preconceptions about the superiority of democracy in the North or the pathologies of democracy in the South. To do so would complicate any attempt to construct a comparative politics of the Americas for no compelling reason. A second key choice was to focus on the comparison of Latin America and the United States and not on the relationship between them, and this simply reflected the task at hand. There is a large and sophisticated literature on the history of American imperialism, Latin American dependency and the strategic context of the Americas (e.g. Schoultz 1998); as well as an impressive body of work on migration, technology transfer, commerce both licit and illicit, economic and military assistance, and much else besides. In contrast, a comparative politics has been confined to those global measures of the quality of democracy that consistently work to reaffirm received prejudice. Yet the international dimension clearly remains relevant to comparative analysis, and in recent decades the role of the financial oligarchies in siphoning capital from the South to the North (Foweraker 1987) has been crucial to the eventual convergence of the polities of the Americas. An integration of the international relations and comparative politics of the Americas should therefore figure as a priority component of any future research agenda.

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References Acemoglu, Daron, and James A. Robinson. 2012. Why Nations Fail: The Origins of Power, Prosperity, and Poverty. London: Profile. Foweraker, Joe. 1987. What’s Good for Citicorp…. Challenge: The Magazine of Economic Affairs. January–February, pp. 37–50. Foweraker, Joe. 2018. Polity: Demystifying Democracy in Latin America and Beyond. Boulder: Lynne Rienner. Johnson, Simon, and James Kwak. 2011. 13 Bankers: The Wall Street Takeover and the Next Financial Crisis. New York: Pantheon Books. Schoultz, Lars. 1998. Beneath the United States. A History of U.S. Policy Toward Latin America. Cambridge, MA and London: Harvard University Press.

CHAPTER 2

Oligarchic Rule and the Patrimonial State

Abstract This chapter provides a comprehensive theory of oligarchic rule in the modern period. The key to this rule is the formation of the patrimonial State, while its stability depends in large degree on the oligarchic alliances that can sustain a coherent ruling coalition. Its variable compatibility with democratic government turns in large degree on the myriad combinations of formal and informal rules that cross the porous divide between the public sphere and private interests. Oligarchic and democratic rule are opposed in principle—the one exclusionary, the other inclusionary—and so there are always limits to their compatibility. But in practice they can coexist and combine, though not always very comfortably. Indeed, the tensions between the two can be recurrently expressed in populist challenges to oligarchic restrictions on democratic choice that may rotate the rulers but rarely advance the democratic agenda. Keywords Patrimonialism · State · Informality · Alliances · Populism

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 J. Foweraker, Oligarchy in the Americas, https://doi.org/10.1007/978-3-030-63146-8_2

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Conceptualizing Oligarchic Rule In the grand sweep of the history of the Americas the resilience of oligarchic rule is a story of far-reaching changes but remarkable survival: a capitalist transformation of the continents that for many years left large swathes of non-capitalist relations intact; a process of modern, bureaucratic state formation that remains imbued with patrimony; and democratic progress that never entirely dissolves or supplants oligarchic power. In more concrete terms, oligarchic rule owes its resilience and reproduction to high levels of social and economic inequality, the patrimonial character of the state, and the uneven coverage over much of the modern period of political representation and the rule of law. But if oligarchic rule survives, it does not stay the same. The mode of oligarchic rule can alter over time in response to changes in State-society relations, including the balance of power between the social classes, and structural shifts in both domestic and international political economy. Above all, it will alter as it adjusts to processes of democratization and the emergence of democratic regimes. This initial inquiry into oligarchic rule will therefore address the general conditions for its survival and continuity through time, before focussing on its compatibility—always a matter of degree—with democratic government, beginning with a discussion of the meaning of oligarchy and oligarchic rule in classical and contemporary political thought. Let us begin with Aristotle. Aristotle’s primary concern was with good government and how it might best be accomplished. Good government was simply that government that best promoted the good life, which was the whole point of the polis. But governments often pursue aims that do not promote the flourishing of the political community as a whole; and so good government can only be achieved by careful design to ensure that rulers have the knowledge and judgement to pursue the good life. Aristotle regarded oligarchy as an impure or corrupt form of rule, a system of rule by the few in pursuit of their own good rather than the good of the political community overall, drawing a clear distinction between the wealth that is required to satisfy human needs and the pursuit of wealth for its own sake and enjoyment. Property can interfere with being a good person—someone concerned with the good of others—and hence a good ruler. Oligarchic rule emerges ‘when men of property have the government in their hands’ (Aristotle 1969, Book III, Chapter 6). It is the rule of the rich in their own exclusive interest. In sum, Aristotle’s objection to

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oligarchic rule was not simply that it arose from an unequal distribution of property, but that it failed to provide for a ‘good life’ by safeguarding the virtue of the political community (Aristotle 1969, Book III, Chapter 7) as manifest in collective deliberation, a share in authority, and justice.1 In contrast to this rounded view, contemporary approaches to oligarchic rule tend to offer a narrowly materialist reading of Aristotle. In one influential view oligarchy refers to a group of wealth-holders which is primarily committed to the defence of its own wealth; and howsoever its system of rule is constructed it must respond to this political objective (Winters 2011, 25).2 Oligarchic strategies in this regard have varied widely over time, with different degrees of direct rule and different degrees of institutionalization of this rule; so different historical contexts have given rise to diverse modes of oligarchic rule. These diverse modes of rule all had the common component of a capacity for the coercion required for ‘wealth defence’ (Winters 2011, 32) but, in this account, all this changed with the rise of the modern state, and the delegation of the task of wealth defence to the state in return for a secure regime of property rights, with the state as the ultimate arbiter and enforcer of these rights. This crucial historical inflection point marks the transition from property claims enforced against the community to property rights enforced by the community or in its name. This transition is said to have taken a very long time, centuries in some cases,3 but eventually the legal protection of property becomes a settled question wherever the modern State is firmly established, and this constitutes ‘the single most important transformation in the history of oligarchy’ (Winters 2011, 208). Whatever the truth of this, the corollary that oligarchic rule is now mediated through the exclusive and autonomous agency of the modern state is implausible on a priori grounds: the assumption that this mediated mode of oligarchic rule can secure oligarchic survival is unsafe if there can be no guarantee that the State will abide by the contract; and oligarchic actors would not therefore be content to accept it in the absence of further protections. For this reason, direct oligarchic engagement with the priority task of protecting accumulated wealth cannot end with the indirect protections afforded by property rights. Indeed, if the modern bureaucratic State does not pose a threat to oligarchic privileges and prerogatives, it is because oligarchies have played the primary role in its formation and retain powerful forms of influence within its institutions and agencies. Far from remaining

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exogenous to the process of modern State formation (as suggested by both Winters 2011 and Przeworski 2010, 92), oligarchies are deeply endogenous to both its formation and function. For Weber, the traditional forms of power and authority that he called patrimonialism tend, in principle, to be replaced by the bureaucratic and legal rationality of the modern State. In this unilinear and Eurocentric story, a power based on patriarchy, personal networks and alliances between armed households (there are many historical variations) would give way to the operation of formal rules within merit-based administrations. But if oligarchic actors can capture the process of Statebuilding and vitiate any attempt to rationalize it, then patrimonialism will become a ‘chronic condition’ (Lachmann 2011, 207), which accompanies and inhabits modern State formation, with ‘familial coalitions of male office holders’ amalgamating localized fiefs, offices and corporations into national political institutions (Adams 2005, 33). It is not that rationalization does not occur, driven—as described by Weber (1978), Tilly (1990) and Mann (1993)—by inter-state competition, war, mobilization and fiscal demands, but that the huge shift in organization, rules and moral standards implicit in this change remains far from complete (Collins 2011, 16). In this way patrimonialism survives the progress of the legal-rational State of the Weberian imagination, and patrimonial practices remain the key to the modern form of oligarchic rule.4 But patrimonial state formation does not signal an end to oligarchic competition—the struggle for power among oligarchic groups with distinct political projects or economic interests. For Winters, the umbrella notion of elites refers to all actors holding some form of minority power within the State or community, whereas oligarchy always has a material foundation that makes it distinctive: oligarchies may hold different views on a range of political issues, but their interests always align along the axis of wealth defence (Winters 2011, 8–11); and this makes them relatively immune to the democratic challenges facing most forms of elite privilege in the modern period.5 But oligarchic interests do not in fact align so easily, but are divided by regions, sectors and policy choices in modern political economy (e.g. O’Donnell 1978); and the variations in the balance between the distinct forms of authority within the State— legal-rational versus patrimonial—are driven in large degree by oligarchic competition for political resources and political leverage (Wright Mills 1956). Indeed, in the historical contexts of Latin America and the United States it will be seen that the process of State formation itself is often

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contingent on the emergence of a ‘governing alliance’ (O’Donnell 1978) between competing oligarchic groups that can constitute the core of an effective ‘ruling coalition’ (North 1981); just as the making of any such alliance may depend in lesser or greater degree on the formation and intervention of a centralized State apparatus. Oligarchic competition is also important to the eventual compatibility of oligarchic rule with democratic progress insofar as democracy provides the formal rules that can ‘civilize’ this competition between oligarchies, as portrayed by Schumpeter in his model of ‘protective democracy’, where the ‘democratic method’ serves to constrain oligarchic ambition and caprice by a countervailing capacity of the voting public to remove elected public officials (Schumpeter 1943, 269). To the degree that oligarchic competition is mediated by formal democratic procedures and constrained by the democratic method, oligarchies will remain non-democratic but— as inferred by Aristotle—not necessarily anti-democratic; and it is this above all that makes oligarchic rule and democratic rule compatible. Dahl identifies Madison’s audacious re-definition of the republic as ‘a government in which the scheme of representation takes place’ (Dahl 1998, 16–17), as the specific historical moment of the American Revolution when the two forms of rule are made compatible; and, even though they express very different kinds of power and means of powerholding (dispersed, formal power versus concentrated, material power), they have continued to prove compatible in many diverse processes of democratization. It is for this reason that Winters can suggest that ‘civil oligarchies are indifferent to democracy. They neither require it to function, nor are they seriously threatened by its existence’ (Winters 2011, 209). But this depends on the historical context and specifically on the degree of conflict or contention that accompanies democratization. Dahl focusses on representative government as oligarchic in origin—the phrase is ‘oligarchy based on narrow and exclusive suffrage’—but open to democratization through the extension of the franchise. In this view, oligarchy can be civilized to the degree that democratic government can begin to overcome oligarchic vetoes (Dahl 1998, 1); while recognizing that the relationship between a country’s democratic political system and its non-democratic economic system has presented a formidable and persistent challenge to democratic goals and practices throughout the twentieth century (Dahl 1998, 179). But this rather anodyne acceptance of an easy separation between economic power and democratic government fails to recognize

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the presence of two distinct claims on power and forms of power-holding, one oligarchic and one democratic. Yet the original political science of Aristotle accepted such mixed systems, and specifically the mixture of oligarchy and democracy that he called ‘polity’ (Aristotle 1969, IV, 8), and even saw a potential virtue in polity of possibly responding to the interests of both rich and poor.6 In the historical setting of the citystate of Athens, this could appear as a matter of constitutional design and prescription. But in the more complex world of modern capitalist society the best that may be hoped is that a successful combination of oligarchic and democratic rule may serve to civilize oligarchies over time (see Chapter 7). It may be the apparent compatibility of the two that explains the strange disappearance of oligarchic rule from analytical view in modern times. Such rule is widely recognized as present in a plethora of historical contexts but is generally deemed to have been made redundant by democratic progress in the modern era. Oligarchic rule is a commonplace of the pessimistic democratic theories of Mosca (1939) and Pareto (1991), which focus on the manifest failure of democracy to ‘put an end to oligarchical power’ (Bobbio 1987, 31), but today it is commonly assumed that democratization has succeeded in supplanting countervailing systems of oligarchic power. Here it will be seen, to the contrary, that not only does oligarchic rule continue to the present, but, as democratization occurs, it can shape and constrain the reach of democratic regimes, and closely influence the conduct of democratic governments. Whether oligarchic rule itself is then civilized by this encounter is contingent on the capacity of the formal rules to impose discipline, as was imagined in the original contract between oligarchies and the modern State, whereby the State would protect property rights in exchange for oligarchic compliance with the rule of law. In historical perspective, there is no logical tendency for oligarchic rule, whether constitutional or not, to respond to the needs and wants of those who are excluded. In most of Latin America such rule was maintained by the violent oppression of subject populations,7 while in the United States the disenfranchisement of black Americans after Reconstruction and the installation of Jim Crow segregation in the states of the Confederacy were equally violent and oppressive. Furthermore, processes of democratization frequently coincide with a resurgence of ‘wild oligarchy’ if the rule of law and the criminal justice system prove too feeble to constrain oligarchic rule (Winters 2011, 38), or if oligarchies can bend and distort the rule of law to suit their own narrow interests.

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In this regard, there is ample evidence of wild oligarchies continuing to intervene directly and violently to protect their property in both Latin America and the United States, past and present (Foweraker and Krznaric 2002), so the investigation of modern oligarchic rule must remain sensitive to residues or recurrences of pre-modern, coercive and sometimes violent intervention to defend accumulated wealth. Here it is worth recalling Aristotle’s ethical interpretation of oligarchic rule as a corrupt form of rule that is corrupt precisely to the degree that it is exclusionary. Since such rule could only ever serve the interests of the few by denying the majority a full share in citizenship, it could not secure the good of the community by defending the res publica. This view remains relevant to struggles for democracy in the modern period insofar as they are constructed as struggles for political inclusion and the rights of citizenship, where an expanding electoral franchise for parliamentary authority can serve to constrain oligarchic rule. In this view, oligarchic rule and democratic rule respond to different values and different principles, and hence there will always be limits to their political compatibility.

Democratic Theory and Oligarchic Rule Analysis of the relationship between oligarchic rule and democratic government has been hampered by predominant tendencies within democratic theory, which routinely assumes that power operates in an exclusively formal fashion, and so focusses on the democratic regime rather than on the State, or simply fails to distinguish between the two; and on the public sphere rather than on private, often corporate powers. At the same time, it also tends to elide normative concerns and empirical judgements (Sartori 1987, 7–8), so expanding the compass of definitions of democracy. Taken together these tendencies mean that it routinely mistakes a part of the political system for the whole, and so systematically inflates the scope of its object of study. Democratic theory, both normative and empirical, becomes coterminous with political theory tout court (Weale 1999, 150–151), with the result that it tends to ignore the protean presence of oligarchic power and to underestimate the importance of patterns of State formation, and therefore assumes the presence of a neutral public administration and effective public institutions (Cameron 2013, 180).8 This assumption is plainly unsafe in the context of the patrimonial practices that permeate the separation of the public and

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private spheres and undermine mechanisms of accountability; and not only the electoral promise of vertical accountability, but also the horizontal accountability that can only be achieved through effective legal constraints on state actors with clear legal competences. By extension it also assumes normal politics to be manifest and accountable within a pristine and uncluttered public sphere that is itself ensconced within a homogeneous democratic system: a world of opinion surveys, political platforms, party competition, ideological debate, civil contestation and lively lobbying and manoeuvring by pressure groups, NGOs and civic associations, that remains uncontaminated by oligarchic power and ignorant of the presence of the State. These twin assumptions of democratic theory in regard of public institutions, on the one hand, and the public sphere of democratic politics, on the other, depend on the defence of a clear and enduring distinction between things private and things public. So long as this defence holds, the assumptions of democratic theory remain plausible (Weale 1999, 14): the conduct of government can be made accountable by following formal procedures that are subject to the rule of law and open to public scrutiny, while the presence of oligarchic power—if recognized at all—would be consigned to the private sphere, where it must operate informally, if not exclusively so. In sum, democratic principles require that political power be made accountable, while oligarchic power seeks immunity from the same; and democratic politics is therefore public, responsive to public opinion, and committed to political equality through universal individual rights, while oligarchic politics is private, protected from political representation, and rooted in the particular ties of clientelism and nepotism. But the defining characteristic of patrimonial politics is the chronic failure to maintain any clear separation of the public and private spheres,9 so that the boundary between them becomes porous and the public sphere susceptible to invasion by private interests, so turning public offices to private purposes and appropriating the republic for private use. This failure is rooted in the state administration itself, where ‘the patrimonial office lacks above all the bureaucratic separation of the “private” and the “official” sphere’ (Weber 1978, 1028). Patrimonial practices can thus develop within and under cover of bureaucratic structures through the ‘appropriation of offices and positions’ that underpin the informality condensed in networks of patronclient relationships (Ermakoff 2011, 182).10 Clientelism is often viewed in the literature as an epiphenomenon without a subject, but in the

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context of the patrimonial state its subject is clearly the oligarchy and its bureaucratic surrogates; and insofar as informality places checks on formal rules, its pervasive presence allows the oligarchy to elude accountability. Looking through the lens of principal-agent theory, patrimonial principals have a dual nature, first as officeholders legitimized by the formality of the office and its role, and second as patrons within networks of clientelist influence and control (Ermakoff 2011, 185–187). Such networks may sometimes serve to increase bureaucratic coordination, at the same time as their arbitrary nature may lead to greater instability; and much will depend on how far patrimonial practices are themselves codified over time, so shifting the relationship between formal and informal rules. Patrimonial practices are not therefore static in content or delivery, and informal rules do not necessarily undermine formal ones. But the complex and always changing admixture of the two is the key to sustaining the modern form of oligarchic rule and the compatibility of oligarchic rule with democratic regimes. The encounter between patrimonial practices and democratic procedures is frequently imagined as a contradiction between informal and formal rules, and so it is in varying degrees. At the extreme, constitutional provisions can be so far undermined that the democratic regime loses a large margin of its legal and operational autonomy, while the relative fixity of the Constitution that is its major virtue—the difficulty of amendment placing contentious issues beyond political strategy and action—is lost or much diminished as it becomes endogenous to political struggles and the play of oligarchic interests. But the encroachment of informal rules— and, by implication, the private manipulation of political society—is not necessarily and always in conflict with the formal rules and procedures of democratic politics, or simply parasitic on pristine democratic institutions. It can also occur, and does so frequently, that formal rules require informal rules to survive and operate effectively, and so the relationship between the two can be mutually supportive or symbiotic (Helmke and Levitsky 2006). Analogously, the institutional veto points that veto player theory sees as raising transaction costs in democratic systems (Tsebelis 2002, 91–115) may equally be understood as linkage points for the informal bargaining and exchange that underpin and sometimes sustain formal democratic institutions.11

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Weber’s original concept of patrimonialism described a form of power based on ‘kin ties, patron-client relations, personal allegiances, and combinations thereof, with few formal rules and regulations’ (Charrad and Adams 2011, 7), that has served historically as a defensive strategy against the claims of rival elites and for the exclusion of subject populations (Lachmann 2011, 208). This characterization sees patrimonialism as an ideal-type of traditional authority that stands opposed to rational-legal bureaucratization. But in the modern period these distinct forms of authority combine in the patrimonial State, and the potential symbiosis between informal and formal rules is inscribed in the modus operandi of this State which routinely fails to maintain a clear distinction between the public and the private realms. The sense of public in this context clearly refers to those things that belong to the republic of citizens and stands opposed to things private that belong to individual citizens or oligarchic organizations and corporations. But Norberto Bobbio insists on a second meaning of public as things apparent, manifest and visible that stands opposed to things hidden, secret and invisible (Bobbio 1987, 79–84). In the latter sense democracy is a system of visible power, where the workings of government are subject to scrutiny and redress. This second meaning of public is also important to the analysis of patrimonial politics because so much of this politics is indeed invisible, even where its practices are not deliberately secretive. Indeed, the combination of and symbiosis between formal and informal rules simply would not work (and could not therefore be reproduced) without the expectation of invisibility. This may be viewed as a matter of morality, as in the many laments about the corruption endemic to electoral-representative politics in the United States and rife throughout the criminal justice systems of Latin America. But, analytically speaking, this is beside the point. What corruption describes is simply a side-effect of the normal practice of patrimonial politics; and it may be the price that has to be paid for the survival of democratic government, even if that government suffers from a certain lack of legitimacy as a consequence.

The Popular Response Schumpeter’s account of ‘protective democracy’ simply stated the nature of modern democracy as he saw it, and derided classical definitions of democracy as ‘so patently contrary to fact’ (Schumpeter 1943, 264–266). In his view, there is no way to determine the common good, therefore,

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public policy and government decisions cannot be justified by appeal to a popular will. Democratic government does not respond to public opinion, but political competition serves to defend the rule of law and protect citizens from the abuse of government power. In practice, the people do not rule, but merely choose among the oligarchic candidates who is to rule them. Popular participation is weak and ill-informed, and citizens are ruled by the social and political elite. In sum, democratic government serves as a constraint on oligarchic rule, nothing more. In this perspective, the principle of political equality may serve to justify democracy, but it does not define it. It certainly does not prevent oligarchic control of government. To the contrary, one of his five fundamental conditions for the stability of protective democracy is ‘a narrow effective range of political decision-making’ (Schumpeter 1943, 232), meaning that most oligarchic privileges and prerogatives are not open to democratic contestation; and this accords with a large body of classical sociological analysis (Pareto 1991, Mosca 1939, Michels 1959) that accepts the inevitability everywhere of an oligarchic ruling class. Despite the many constraints, checks and balances of democratic constitutions, ‘historical evolution undoes all the prophylactic measures that have been adopted for the prevention of oligarchy’ (Michels 1959, 406). Historically, where democratic rules and procedures have failed to mitigate the ‘tangible evils’ (Rustow 1970, 352) flowing from oligarchic rule, a frustrated public has often sought remedy in populist mobilization. Common to populisms past and present is a bipolar and antagonistic political logic that pits the people against the oligarchy—lo popular against lo oligárquico in the Latin American vernacular. It is also a reductive or simplifying logic in the fictional unity attributed to both people and oligarchy (Riker 1982), and ambiguous in its construction of the people as both all of the people and just the excluded, and its antagonist as the ancien régime, the establishment, the corrupt political class, the corrupted political institutions, or whatever suits the political purpose of the moment (Laclau 2005, 102–111). In the electoral politics of the Americas, it expresses a direct appeal to the people against the irksome oligarchic constraints on democratic choice and decision-making, and commonly against a restricted and elite-dominated party system. It thus projects the potentially disruptive effects of the founding democratic myth of popular sovereignty into the public sphere, moving beyond the recurrent electoral veto of Schumpeter’s protective democracy to challenge

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oligarchic rule. In this respect, its dominant rhetorical trope of animus against the oligarchy should be taken at face value. The crises that erupt from time to time in modern democratic systems often reflect the inherent tensions in the contradictory relationship between oligarchic rule and democratic government. And just as they express the tensions between these very different forms of powerholding, the crises frequently require a re-articulation of these different domains in order to contain them; and this process usually entails sufficient movement in the ‘circulation of elites’ (Pareto 1991) to re-shape the linkages between oligarchic rule and the public sphere of mass mobilization and electoral politics. Yet however strong the populist impulse, the re-articulation is routinely confined to partial changes in the composition of the ruling coalition (North 1981) that maintain the basic properties of protective democracy intact. Thus, counterintuitively, populism can play a key role in the reproduction of oligarchic rule in democratic regimes (Foweraker 2018, Chapter 6). What distinguishes populism in this regard from the protection of property rights or the predominance of patrimonial practices is its dynamism and its capacity to make an immediate and visible political impact. Despite the appearances, therefore, populism is not a mere political epiphenomenon that is indeterminate and incidental to mainstream electoral and democratic politics in the Americas. On the contrary, it is rooted in the political conditions of the always variable and contested compatibility of oligarchic rule and democratic government, and since the relationship between these two can never be stable, it is destined to recur again and again. In Latin America populism is so pervasive it may be judged to be expressive of its normal politics, but across the Americas it expresses the tensions that are everywhere evident between a public sphere of democratic politics that requires political accountability and a private, patrimonial realm of oligarchic powers that seeks immunity from the same. For most periods in most places these tensions are managed through political party competition, democratic procedure and the mix of formal and informal rules that characterizes high politics. But when the tensions become acute in conditions of low institutional capacity, or moments of little institutional flexibility and rising popular demands, they can find expression in a populist insurgence, which may alleviate the tensions in the short term but never—or never yet—resolve them. Thus, just as populism reflects, so it routinely reinforces patterns of patrimonial politics, as well as relying on clientelist and paternalist mechanisms

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for building political followings and mobilizing the vote. The corollary is that populism may present a challenge to oligarchic power, but only rarely works to advance democracy because it tends to reproduce the same or similar politics in a slightly different guise. Indeed, despite its rhetorical tropes, it may finally reinforce what it most fervently seeks to chastise and suppress, the presence of oligarchic power. For this reason, though the context of ‘protective democracy’ makes populism intelligible, it remains an ambiguous phenomenon12 that straddles oligarchic rule and democratic politics, promising much, but delivering only transitory and often illusory popular gains. There is an analytical distinction to be made here between populism as a direct response to oligarchic rule and populism as the expression of the inherent tensions between oligarchic rule and democratic government (Foweraker 2018, Chapter 6). The key to the continuity of oligarchic rule in the modern period is the formation of the patrimonial State, while the stability of this rule depends in large part on the forging of an oligarchic alliance—or alliances—that can sustain a coherent ruling coalition. Equally, its variable compatibility with democratic government turns on the combination of formal and informal rules that derive from the dissolution of the division between public and private spheres. These conditions also describe—in part—the contradictory combination of oligarchic and democratic rule described by Aristotle as a polity (see Chapter 7). But the continuity of oligarchic rule does not imply fixity, and its reproduction can require and entail a change from one mode of rule to another, giving rise to distinctive modes of rule in different periods and different places. ‘Everything must change so everything can stay the same’. Such changes are often driven by a break-down in the alliance or alliances that sustain oligarchic rule, and this in turn may result from a transformation of the political economy, or a radical reorientation of economic direction and priorities, or a revolutionary political movement or threat to the integrity of the State (separately or in any combination); or, most relevant here, in response to a process of democratization. For Aristotle, a mode of rule simply described the constitutional arrangements—whether kingship, aristocracy, oligarchy, democracy, polity, or whatever—that served some interests but not others, with a focus on narrow interests versus those of the community. Today, in place of constitutional arrangements, the definition of a mode of rule would encompass the ensemble of institutions, procedures and practices, both formal and informal, that are required to reproduce it.

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Notes 1. I am indebted to Max Cameron for highlighting the important ethical dimension of Aristotle’s political thought. 2. See also Winters and Page (2009) and discussion in Gilens and Page (2014). 3. The historical arc in Europe is as extensive and complex as the transition from feudalism to capitalism, while it covers virtually the whole of postcolonial history in most countries of Latin America, and runs from the Revolution to the 1880s in the United States. 4. This has important consequences for the conduct of modern democratic governments. As Gilens and Page conclude from their extensive, datadriven study, ‘economic elites and organized groups representing business interests have substantial independent impacts on US government policy, while mass-based interest groups and average citizens have little or no independent influence’ (Gilens and Page 2014, 564). They comment that ‘we believe that if policymaking is dominated by powerful business organizations and a small number of affluent Americans, then America’s claim to be a democratic society is seriously threatened’ (Gilens and Page 2014, 577). 5. But the relative immunity of oligarchic power does not derive from its material foundation per se so much as from the political conditions for this immunity which are concentrated in the patrimonial state. 6. Aristotle departs from the premise that ‘those constitutions which aim at the common good are right…while those that aim only at the good of the rulers are wrong’, so kingship or aristocracy or polity can be a ‘right’ constitution. Oligarchy is a debasement of aristocracy, serving only the few rather than the common good, while democracy serves only the propertyless, or ‘men without means’ (Aristotle 1969, III, 6). He observed that ‘now there has been an all-round increase in the size of cities…it is hard to avoid having a democratic constitution’ (Aristotle 1969, III, 9), but considered that in general democracy was ‘the least objectionable of the deviations’, except where ‘laws do not rule’ and democracy deteriorates into demagoguery, which is rule by decree of the popular assembly (Aristotle 1969, VI, 2). Despite the reputation of Athens as the birthplace of democracy, there is a dearth of Athenian democratic theory. All writers whose works survive were more or less sympathetic to oligarchy (Lakoff 1996, 55), and there is good reason to suppose that even the democratic regimes of Athens were often oligarchies in all but name (Lakoff 1996, 43). 7. There were exceptions like the ‘coffee pact’ in Costa Rica during the Depression or the progressive policies pursued by the governments of Chile and Uruguay in the late nineteenth and early twentieth centuries.

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These cases were distinguished by their relative social and economic equality. Cameron refers to Schumpeter, Dahl and Przeworski, observing that ‘they envisage a democracy of voters not citizens’ and the politicians who compete for the votes are decision-makers not law-makers. In this view, ‘democracy is restricted to its executive moments’. The people vote, their preferences are aggregated, and political leaders are then selected to make policy decisions (Cameron 2013, 180). In O’Donnell’s view clientelism ‘is antagonistic to one of the main aspects of the full institutional package of polyarchy: the behavioural, legal and normative distinction between a public and a private sphere’ (O’Donnell 1999a, 181). In a different account, patrimonialism survives where the modern state has not penetrated or re-emerges wherever bureaucratic rules are resisted or where the state fails to impose the rule of law. This may be imagined in spatial terms, as in O’Donnell’s account of ‘brown areas’ in the countries of Latin America (O’Donnell 1999b); though O’Donnell remains very aware of the ubiquity of informality, described as the ‘particularism [that] vigorously inhabits most formal political institutions’. He assumes, quite plausibly, that particularism is a permanent feature of human society and only recently, and only in some places and institutional sites, has it been ‘tempered by universalistic norms and rules’ (O’Donnell 1999a, 184). This may be best illustrated in the sphere of executive-legislative relations in Latin America, where the informal rules of executive patronage, ‘pork’ and logrolling frequently combine with the procedural rules and committee structure of the legislatures to provide legislative support for executive initiatives and so contribute to ‘governability’. In this account party indiscipline in voting and switching and the opportunistic attitude of individual legislators are not only common but necessary to the predominant style of coalitional presidentialism in Latin America. It is in this ambivalent world that Tsebelis’s (formal) ‘veto-points’ can become— conversely—(informal) opportunities for cooperation and corruption. Yet this widespread pattern of successful collusion may render legislators and their parties increasingly less responsive to constituency claims and popular preferences, so revealing a stark trade-off between increased governability and democratic representation (Foweraker 1998). This essential ambiguity of populism is reflected in the traditional ambivalence of its interpretations, where populist leaders prepared to push through the necessary reforms against vested interests are a good thing for democracy (Remmer 1998), but executive overreach and the failure of institutional checks and balances are a very bad thing for democracy (O’Donnell 1994). The ambiguity itself reflects the strange amalgam of populism’s narrowly electoral notion of the popular will and its ineluctable reliance on oligarchic politics.

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References Adams, Julia. 2005. The Familial State: Ruling Families and Merchant Capitalism in Early Modern Europe. Ithaca, NY: Cornell University Press. Aristotle. 1969. The Politics, trans. and ed. T. A. Sinclair. Harmondsworth: Penguin Books. Bobbio, Norberto. 1987. The Future of Democracy. Cambridge: Polity Press. Cameron, Maxwell A. 2013. Strong Constitutions: Social-Cognitive Origins of the Separation of Powers. Oxford: Oxford University Press. Charrad, Mounira M., and Julia Adams. 2011. Patrimonialism, Past and Present. In Patrimonial Power, ed. Charrad and Adams, special edition of Annals of the American Academy of Political and Social Science 636, 1, 6–15, July. Collins, Randall. 2011. Patrimonial Alliances and Failures of State Penetration: A Historical Dynamic of Crime, Corruption, Gangs, and Mafias. In Patrimonial Power, ed. Charrad and Adams, 16–31. Thousand Oaks, CA: Sage. Dahl, Robert. 1998. On Democracy. New Haven, CT and London: Yale University Press. Ermakoff, Ivan. 2011. Patrimony and Collective Capacity: An Analytical Outline. In Patrimonial Power, ed. Charrad and Adams, 182–203. Thousand Oaks, CA: Sage. Foweraker, Joe. 1998. Institutional Design, Party Systems and Governability— Differentiating the Presidential Regimes of Latin America. British Journal of Political Science 28: 651–676. Foweraker, Joe. 2018. Polity: Demystifying Democracy in Latin America and Beyond. Boulder, CO: Lynne Rienner Publishers. Foweraker, Joe, and Roman Krznaric. 2002. The Uneven Performance of the Democracies of the 3rd Wave: Electoral Politics and the Imperfect Rule of Law in Latin America. Latin American Politics and Society 44 (3): 29–60. Gilens, Martin, and Benjamin I. Page. 2014. Testing Theories of American Politics: Elites, Interest Groups, Average Citizens. Perspectives on Politics 12 (3): 564–581. Helmke, Gretchen, and Steven Levitsky. 2006. Introduction. In Informal Institutions and Democracy: Lessons from Latin America, ed. Helmke and Levitsky. Baltimore, MA: Johns Hopkins University Press. Lachmann, Richard. 2011. Coda: American Patrimonialism: The Return of the Repressed. In Patrimonial Power, ed. Charrad and Adams, The Annals of the American Academy of Political and Social Science 636 (1): 204–230. Laclau, Ernesto. 2005. Populism. London: Verso. Lakoff, Sanford. 1996. Democracy: History, Theory, Practice. Boulder, CO: Westview Press. Mann, Michael. 1993. The Sources of Social Power, vol. II. Cambridge: Cambridge University Press.

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Michels, Robert. 1959. Political Parties: A Sociological Study of the Oligarchical Tendencies of Modern Democracy. New York, NY: Dover Publications. Mosca, Gaetano. 1939. The Ruling Class. New York, NY: McGraw-Hill. North, Douglass C. 1981. The Neoclassical Theory of the State. In Structure and Change in Economic History, 20–32. New York, NY: Norton. O’Donnell, Guillermo. 1994. Delegative Democracy. Journal of Democracy 5 (1): 55–69. ———. 1999a. Illusions About Consolidation. In Counterpoints: Selected Essays on Authoritarianism and Democratization, ed. O’Donnell, 175–194. Notre Dame: University of Notre Dame Press. ———. 1999b. Polyarchies and the (Un)rule of Law in Latin America. In The (Un)Rule of Law and the Underprivileged in Latin America, ed. Juan E. Méndez, Guillermo O’Donnell, and Paulo Sérgio Pinheiro, 303–337. Notre Dame: University of Notre Dame Press. ———. 1978. State and Alliances in Argentina, 1956–1976. Journal of Development Studies 15 (1): 3–33. Pareto, Vilfredo. 1991. The Rise and Fall of Elites: An Application of Theoretical Sociology. New Brunswick: Transaction Publishers. Przeworski, Adam. 2010. Democracy and the Limits of Self-Government. New York, NY: Cambridge University Press. Remmer, Karen. 1998. The Politics of Neoliberal Reform in South America, 1980–1994. Studies in Comparative International Development 33 (2): 3–29. Riker, William. 1982. Liberalism against Populism: A Confrontation between the Theory of Democracy and the Theory of Social Choice. San Francisco, CA: Freeman. Rustow, Dankwart A. 1970. Transitions to Democracy: Toward a Dynamic Model. Comparative Politics 2 (3): 337–364. Sartori, Giovanni. 1987. The Theory of Democracy Revisited: The Contemporary Debate, vol. 1. Chatham NJ: Chatham House Publishers. Schumpeter, Joseph. 1943. Capitalism, Socialism, Democracy. London: George Allen and Unwin. Tilly, Charles. 1990. Capital, Coercion and the European States, AD 990–1990. Oxford: Blackwell. Tsebelis, George. 2002. Veto Players: How Political Institutions Work. Princeton, NJ: Princeton University Press. Weale, Albert. 1999. Democracy. Basingstoke: Macmillan. Weber, Max. 1978. Economy and Society: An Outline of Interpretive Sociology, ed. Guenther Roth and Claus Wittich. Berkeley, CA: University of California Press. Winters, Jeffrey A. 2011. Oligarchy. Cambridge: Cambridge University Press. Winters, Jeffrey A., and Benjamin I. Page. 2009. Oligarchy in the United States? Perspectives on Politics 7: 4, 731–751. Wright Mills, Charles. 1956. The Power Elite. New York, NY: Oxford University Press.

CHAPTER 3

Modes of Oligarchic Rule in Latin America

Abstract The continuity of oligarchic rule can entail a change from one mode of rule to another, with a mode of rule described as the ensemble of institutions and practices required to reproduce it. This gives rise to distinctive modes of rule in different periods and places, and this chapter describes the successive modes of oligarchic rule in Latin America since Independence. The difficulty of making a general argument about the twenty republics of Latin America is partially resolved by focussing on Argentina as a clear case of patrimonial State formation that can also illustrate the complexities of oligarchic competition and alliance. Nonetheless, the chapter seeks to outline the broad contours of oligarchic rule across Latin America as it moves from the oligarchic republics of the late nineteenth and early twentieth centuries, to the partially democratic republics of the mid-twentieth century, and to the current neoliberal mode of rule. Keywords Latin America · Argentina · Oligarchy · Populism · Crisis

co-authored with Maxwell A. Cameron, Professor of Political Science, University of British Columbia, Vancouver, BC, Canada. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 J. Foweraker, Oligarchy in the Americas, https://doi.org/10.1007/978-3-030-63146-8_3

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The Historical Context The complex relationship between oligarchic rule and the patrimonial State can explain the general conditions for the continuity of oligarchic rule in the modern period. But this remarkable continuity encompasses significant changes in the mode of oligarchic rule in response to the process of State formation, changes in State-society relations and the progress of democracy. The advance of democracy does not supplant oligarchic rule, but it does complicate its operation and reproduction, especially insofar as these depend increasingly on oligarchic alliances to sustain them; while the process of State formation changes the form and projection of political authority and its capacity to promote and underpin such alliances. Oligarchic rule itself depends on maintaining a high degree of social and economic exclusion in a context of social and economic inequality, and so must adapt to democratic pressures for inclusion by adopting new strategies and deploying new mechanisms to counteract these pressures. Its variable success in this regard will have a considerable influence on the conduct of democratic government, as this inquiry into modes of oligarchic rule in Latin American will reveal. As ever, considerable caution is required when making general statements about the twenty or so republics of the continent. For this reason, the inquiry will make recurrent reference to Argentina, which provides an empirically rich political and institutional context for identifying and illustrating the key points of the analysis. Most countries of Latin America have been independent since the beginning of the nineteenth century (unlike most world regions outside of Europe), but the struggle for independence occurred prior to the construction of a centralized State; and the challenges of establishing any institutionalized form of political authority were only resolved much later in the century, if at all. The lessons of direct oligarchic engagement in State formation, as recounted in the previous chapter, therefore apply a fortiori in Latin America, where the initial lack of State control—even by the minimum Weberian definition of a plausible claim to exercise a monopoly of violence within a given territory (Weber 1978, 1041)—was experienced as a palpable incapacity to impose and protect property rights. At the same time, oligarchic actors were divided by region, sector and political convictions, and in most cases this fissiparous presence prevented any early achievement of a stable governing coalition that might act as a mainstay of State formation and underpin an effective system of rules.

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In the history of the times, these twin challenges of State formation and oligarchic domination did not run in parallel but were deeply intertwined; and the oligarchic struggles for power were uncivil and often violent efforts to achieve direct control over incipient State authority. The difficulties of overcoming oligarchic divisions over this period were rooted in a very partial and variegated capitalist transformation of the economy, and the creation of a highly heterogeneous economic environment. This was conceptualized by the structural Marxism of the 1970s as an ‘articulation of modes of production’ (Foweraker 1978) that—though theoretically rather elaborate in retrospect—did provide a formal description of the political economy of State formation, and an explanation for the failure to establish centralized political control. In most cases this could only come with a measure of integration into the world market, the subsequent flow of fiscal revenue and the emergence of a commercial and financial oligarchy that could take the lead in forging such control in alliance with landowning oligarchies in the localities and regions.1 In contrast to the bureaucratic construction of the State according to legal rules and protocols, here were the origins of a different pattern of State formation, where State institutions and practices were shaped to suit private and corporate interests as the price of achieving territorial control and the principal imperative of political order. Much followed from this. The constraints imposed elsewhere by liberal constitutionalism were felt only faintly in Latin America, where liberalism often took on conservative and positivist overtones under the watchwords of Order and Progress—as inscribed on the Brazilian flag; the fractured nature of territorial control with extensive concessions to regional oligarchies left incomplete any idea of the nation, in Benedict Anderson’s sense of an ‘imagined community’ (Anderson 1983); and the endemic use of State patronage to cement public loyalties led to the growth of widespread clientelist networks that impinged permanently on State-citizen relationships, and indeed on the construction of citizenship itself. Citizenship was restricted, representation limited and constitutionalism only regulated the affairs of oligarchic actors and their political surrogates. Weber’s conception of the modern State as legal-rational in nature meant that it should operate according to the rule of law through predictable bureaucratic systems of tax, surveillance and institutional control, with the rule of law the bulwark that distinguishes and separates the public sphere from the realm of private interests. The separation

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of the public sphere is the key to the always incomplete transformation of the State into the guarantor of an inclusive mode of rule. But the process of State formation described here leads, very differently, to a symbiosis of patrimony and bureaucracy, where familial and personal networks and loyalties sit within legal-rational administrative contexts, and where informal rules of patronage and clientelism coexist with the formal rules and roles within the bureaucracy. This incursion of oligarchic interests and private agendas into the public sphere through clientelistic networks is the mark of patrimonial state formation, and—critically for our purposes—serves to sustain oligarchic rule even as limited forms of democracy begin to take root in the oligarchic republics of the late nineteenth and early twentieth centuries.2 The process of democratization in Latin America, howsoever variegated and halting, has deep historical roots (Przeworski 2012, Posada-Carbó 2008, 2017),3 but ‘patrimonialism was … a key institutional component’ in the coalitions that sustained the oligarchic parties and governments that superseded caudillo domination in the latter part of the nineteenth century (Mazzuca 2010, 351); and it is patrimonialism above all that begins to determine the characteristic content of the democratization that occurs in the continent.4 Mainstream accounts of these oligarchic republics (e.g. Ruth Berins and David Collier 1991, 786; Gilbert 2017) agree that they achieved sufficient political stability to support the kind of export growth that led to the emergence of new and dynamic oligarchic actors linked to trade and finance; while oligarchic rule was characterized by a tight control over the political process reflected in a very restricted franchise, widespread electoral fraud and an occasional resort to dictatorial rule. But these accounts refer repeatedly to the emergence and eventual breakdown of an oligarchic State, whereas this analysis refers throughout to a patrimonial pattern of State formation that supports a specific mode of oligarchic rule in this period.

The Democratization of Oligarchic Rule The story of democratic participation in Europe and in lesser degree the United States recounts the extension of the vote beyond the propertied classes, as a means of redressing or assuaging social and economic inequalities, as well as bolstering legitimacy. The growth of the suffrage and the subsequent creation of a broad political public opens the way to mass-based competitive party systems with distinctive political projects

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and policy platforms. At the same time, labour unions and interest groups, sometimes in tandem with political parties, begin to engage in the policy process and, in some instances, become ‘partners’ in the business of government; while investment in the kinds of public goods that enable the exercise of full citizenship (health, education, pensions) tended to reinforce the idea of shared membership in the polity. Endogenous industrial transformation provided the material foundation for the kind of class compromises that enabled oligarchic modes of rule to be partially superseded by more inclusive governance, especially in the context of robust public institutions. In Latin America, in contrast, export-oriented growth abruptly gave way to import-substituting industrialization in the 1930s, in the context of the depression and World War II, without fundamentally altering the patrimonial character of the State. Where popular incorporation precedes the development of civil rights and inclusive representation, participation is less likely to guarantee universal rights claims. Rather, participation is curtailed by clientelist forms of political control, political parties are initially the vehicles of individual politicians rather than the political expression of public preferences or interests, and much of the citizenry remained effectively disenfranchised despite the extension of the suffrage. Thus, universal rights such as the vote were subverted by particularistic ties and loyalties, and controlled by the patron, the ward boss or the landowner5 ; while equality before the law was only ever a prospect for the people of property who remained more equal than the others. In this context mass-based politics often led to populism and charismatic leadership rather than routinized competition between settled political parties; and although there is a growth of the bureaucratic State in countries like Argentina, Brazil and Mexico, it was legitimized by clientelism and a newly manufactured nationalism, based on national developmental and industrialization projects. Not infrequently, these populist projects sought political support in an emergent national bourgeoisie allied to a nascent and newly incorporated urban working class.6 Their nationalism expressed a different set of interests from that of the landowners and financiers of the export oligarchy, often portrayed as subservient to imperialist interests abroad.7 The divergent histories of Europe and Latin America led to very different sequences in the development of citizenship rights. In T. H. Marshall’s classic account of the history of rights in England (Marshall 1992 [1950]), it is civil rights that emerge first to support the growth

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of market capitalism, to be followed by the political rights of suffrage and, much later, the social rights implicit in universal education, welfare systems and employment protections. But the sequence in Latin America mainly follows the reverse order, with social rights arriving first in the form of corporatist and clientelist protections for particular constituencies, often for the purposes of political incorporation and control of unions, associations and party cadres8 ; political rights second, but only gaining traction slowly with a more extensive enfranchisement of a political public; and civil rights third and very imperfectly, with a spotty and precarious presence across the continent even today. Over the long term, this predominant pattern of patrimonial practices continues to impinge on democratization in Latin America in three salient ways. First, it is democratization without republicanism because no political and cultural defence of the res publica (or, by extension, the political responsibilities of citizenship) is possible where oligarchic interests can invade the public sphere and appropriate the commonweal for private use. Second, patrimonialism entails the prevalence of informal rules—in fields as diverse as law enforcement, political party systems and executive-legislative relations, with clientelism the quintessential expression of oligarchic power condensed in specific relationships of favour, protection and personal claims. And third, as noted above, this informality means that the patrimonial State cannot easily act as the ultimate guarantor of the universal claims of citizenship rights.

Continuity and Change in Oligarchic Rule It is patrimonial State formation and patrimonial practices that combine to ensure the survival of oligarchic rule in the modern period. But this modern form of oligarchic rule has been expressed historically in distinct modes of rule that change with shifts in State-society relations and developments in domestic and international political economy. The oligarchic republics in the Latin America of the late nineteenth and early twentieth century constituted one such mode of rule that was always exclusionary, routinely oppressive and often violent. There was competition (as in the ‘competitive oligarchy’ coined by Dahl 1971) but it was competition between oligarchic families, factions, cliques and cabals; and the competition was largely constrained by relatively stable oligarchic alliances.9 This was a specific mode of oligarchic rule that yet revealed its general tendencies, viz. to defend accumulated wealth, exclude the majority and compete

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with other oligarchies for political power and political advantage. But the changed context of Latin America post-1930, including—to keep things diagrammatically simple—the crisis in the world market, the ensuing global depression, rapid urbanization, exponential expansion of State bureaucracy, State-led development models and an expanding electoral franchise, required a different mode of oligarchic rule, where oligarchic competition was often more acute and oligarchic alliances ever more complex. Furthermore, oligarchic rule had to adapt to and combine with democratic constitutions and procedures, increasingly inclusive elections, a growing political public, and rising levels of popular mobilization. The discussion of patrimonialism in the previous chapter focussed attention on the political conditions for the potential compatibility of oligarchic rule and democratic government, but the stability of the ensuing political arrangements continues to depend on forging oligarchic alliances that can constitute the political core of an effective ruling coalition.10 Where all these conditions obtain, the combination of informal and formal rules can work well enough to civilize oligarchic competition and channel it into a semblance of Schumpeter’s ‘democratic method’ (Schumpeter 1943), as it did in countries as different as Argentina 1916– 1930, Brazil 1945–1961 (in some regions), Chile 1932–1973, Colombia 1957 to the present, Costa Rica 1948 to the present, Uruguay 1911– 1973 and Venezuela 1958–1988. Conversely, where no such alliance can be forged then oligarchic competition may descend, at worst, into a ‘catastrophic equilibrium’ (Gramsci 1973) of the kind described by Guillermo O’ Donnell in Argentina from 1955 to 1976, where the radical instability of such competition induced a rising spiral of increasingly violent confrontation that eventually threatened the political coherence of the State as the principle of political order (O’Donnell 1978).11 Instability of this kind, in different degrees, has also characterized much of the modern history of Central America (excluding Costa Rica), Peru, Bolivia and—intermittently—Mexico. Argentine exceptionalism in this regard was expressed in the failure to establish a new mode of oligarchic rule that might prove compatible with democratic politics and provide a stable basis for economic development. The exceptionalism began with the emergence of what O’Donnell calls the ‘pampa bourgeoisie’ in the nineteenth century.12 Unlike other South American nations whose economies depended on haciendas, plantations or export enclaves, Argentina was incorporated into the world capitalist system through a ranching or estancia economy, which meant that it

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developed an ‘early domestic agrarian bourgeoisie with an accumulation base of its own’ which was allied with the more diversified urban industrial and commercial bourgeoisie (O’Donnell 1978, 4). This bourgeoisie controlled the nation’s principal resource, the pampa, and exercised an almost complete control over the State—there was not much the State could do without the say-so of the Sociedad Rural. It thus constituted a kind of hegemonic oligarchy unlike any other in the Latin America of the time. But this hegemony was challenged by the mass immigration and rapid urbanization of the late nineteenth and early twentieth centuries, by the early introduction of universal male suffrage by Roque Sáenz Peña in 1912, and the political rise of the Radical Party under Hipolito Yrigoyen; and this is the point of departure for O’Donnell’s inquiry into Argentina’s failure to fulfil the promise of successful State-directed capitalist development despite the favourable conditions created by the manner of its incorporation into the world market. For present purposes it is not the object of O’Donnell’s inquiry that matters so much as his analytical approach with its emphasis on oligarchic competition and alliance.13 His concern with capitalist development provides a salutary reminder that oligarchies of the modern era are mainly capitalist (or on the way to being so) and thus motivated not just by defending wealth but also by accumulating it. But it is not capitalist competition or social relations per se that drives his analysis, but oligarchic competition that seeks the political advantage that can stymy market competition through manifold forms of rent-seeking such as monopolies, cartels, the manipulation of exchange rates and State subsidies. In O’Donnell’s view an alliance between the pampa bourgeoisie and the ‘oligopsonistic urban bourgeoisie’ might have constituted the kind of stable governing alliance that could promote capitalist development, but this was prevented by the particularities of Argentine political economy, which led to a cyclical pattern of inter-oligarchic pacts and pendular shifts in policy orientations. To make a long story short, the larger urban bourgeoisie tended to form an alliance with the newer ISI industries and the popular sectors to defend the internal market when the economy was expanding. However, bottlenecks, balance of payments problems and inflation were frequent problems that afflicted this strategy. When these occurred, the large urban bourgeoisie would swing back towards the pampa bourgeoisie and accept its demands for a return to economic orthodoxy, stabilization, devaluation and contraction. But this alignment was disrupted by the defensive

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alliance between the popular sectors and the newer ISI industries. Their opposition during downward phases of economic performance served to disrupt inter-oligarchic alliances and demonstrate the ineffectiveness of repression. Over time this conflictual pattern intensified, and with each swing in the pendulum the State became more deeply colonized by the competing groups. Although never able to challenge the basic parameters of capitalist development, the defensive alliance prevented the consolidation of a stable pattern of domination and accumulation. The scene was set for this cyclical pattern of conflict and confrontation by the contradictory nature or desfasaje of Argentina’s transition from oligarchic to democratic republic. As we saw above, the sudden expansion of the franchise and the early electoral dominance of the Radical Party appeared to advance this historical agenda, but the transition was thrown into reverse with the post-1930 conservative restoration and the return of widespread electoral fraud and violence. It was as if the rapid progress of democratic politics had impelled a return to the ways of the ‘wild’ oligarchy, reinforcing the exclusionary logic of oligarchic rule in the context of a more inclusive polity. This was in part a response to the unusual strength and autonomy of the popular sectors in Argentina, which found expression in the Peronist—Justicialist—mobilization of the early 1940s and beyond14 ; and the fact that the main consumption goods of the urban poor—wheat and beef—were also the main export products of the rural oligarchy removed any margin for compromise. In these circumstances the electoral cycle, far from civilizing oligarchic competition, only served to exacerbate it, provoking recurrent democratic breakdowns and military interventions. This reading of O’Donnell’s early essay looks forward to his later preoccupation with patrimonialism insofar as oligarchic competition takes place on the institutional terrain of the patrimonial State which—in conditions of ‘catastrophic equilibrium’—proves vulnerable to capture by contending oligarchies and popular sectors alike. In other words, routinized rent-seeking eventually leads to the balkanization of the state and the advent of the ‘crisis of domination’. The lesson here is that the patrimonial state is present throughout modern Latin America, but the degree of patrimonialism can and does vary over space and time. Argentina’s near neighbours, Chile and Uruguay, both succeeded in establishing a reasonably stable pact of domination over this same period because they had consolidated a more constitutional mode of oligarchic rule early in their independent history—and, by extension, a less patrimonial state.

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The radical instability that defines Argentine exceptionalism in this period is distinct from the more mundane economic and political crises that may be commonly expected to beset democratic governments from time to time. Furthermore, given the remarkable continuities in oligarchic rule in Latin America, it should come as no surprise that such crises characteristically take the form of populist insurgencies, which express a direct appeal to the people against the constraints imposed by oligarchic rule on democratic choice and decision-making. These constraints are often most obvious in the restricted range and exclusive nature of the political party system, so the insurgencies do not tend to compete within the system so much as reject it tout court. In this way, as argued in the previous chapter, populism projects the potentially disruptive effects of the founding democratic myth of popular sovereignty into the public sphere, moving beyond the recurrent electoral veto of Schumpeter’s protective democracy to challenge oligarchic rule; and in this respect its dominant rhetorical trope of animus against the oligarchy should be taken at face value. But just as it reflects, so populism routinely reinforces patterns of patrimonial politics, so it may challenge oligarchic rule but tends to reproduce the same or similar politics in a different guise (Foweraker 2018, Chapter 6). Nonetheless, populist movements can and often do propel some (usually minor) ‘circulation of elites’ (Pareto 1991) to achieve some (partial) change in the composition of the ruling coalition (North 1981), and some adjustment or extension to the political party system, which taken together can constitute a new political conjuncture. But such changes only rarely disturb the core oligarchic alliance of the coalition, and so, counterintuitively, populism can finally be understood to play a key role in the reproduction of oligarchic rule. Thus, the continuity of the modern form of oligarchic rule is rooted in patrimonial practices and their myriad intersections and combinations with democratic procedures, while the stability of this rule derives from oligarchic alliances at the core of the ruling coalition, and a capacity to adjust to recurrent crises through a partial re-composition of the ruling coalition and/or a re-shaping or extension to the political party system that may characterize a new political conjuncture. A breakdown in the core oligarchic alliance, on the other hand, will usually result from a major transformation of the political economy, or a radical reorientation of economic direction and priorities, or a revolutionary political movement or threat to the integrity of the State (separately or in any combination), and would be expected to lead to a change in the mode of oligarchic

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rule. Indeed, with the benefit of hindsight it might be said that Argentina was not so very exceptional after all, once the democratic republics of the twentieth century had nearly all collapsed and succumbed to military intervention—the exceptions being Colombia, Costa Rica and Venezuela. For democratic politics and oligarchic practices to be made compatible once more would require the construction of a new mode of oligarchic rule, less transparent in its actions, more diffuse in its effects and more complex in its exclusionary logic. It would also prove to be more encompassing in its mutual imbrication with democratic rules and procedures, with the boundaries between formal and informal rules becoming even less certain and yet more opaque.

The Neoliberal Mode of Oligarchic Rule The compatibility of oligarchic rule and democratic government, as analysed in the previous chapter and above, was always contingent on the variable capacity of the Schumpeterian ‘method’ to discipline oligarchic competition and channel popular contestation; and with the return to democracy in contemporary Latin America over the course of the 1980s this compatibility has been severely tested by the constitutional promise of universal rights, a rising trajectory of popular mobilization, and multiple demands for political inclusion. The political tensions arising from this context have impelled an increasing incidence of populist insurgency. Elite reactions have generally not resulted in democratic breakdown—as in previous decades—but in the restoration of oligarchic powers and prerogatives within degraded democratic regimes. These oscillations drive the political cycles that characterize the progress of democracy in the region, or its lack, and obey a political logic that is inscribed in a new mode of oligarchic rule. It is well known that the return to democracy in Latin America was accompanied by a widespread if uneven shift towards neoliberal policy prescriptions. At first sight this shift can appear as a simple coincidence driven by the imperatives of global capitalism over which regional democratic governments had little control, and therefore as orthogonal to the renewal of oligarchic rule in highly mobilized democracies. After all, the most vocal advocates of neoliberalism have mostly been technocrats trained in economics (like Domingo Cavallo, Carlos Salinas or Pedro Pablo Kuczynski) and consequently more disposed to place their faith

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in markets and competition than to embrace the messy work of democratic bargaining and compromise. They promised rational and efficient solutions, untainted by rent-seeking and the inefficiencies of bureaucratic politics and aspired to neutralize the dysfunctional politics of populism by locking neoliberal constraints on policymaking into the future. But it is widely recognized that this was a political project—and the technocrats were dubbed ‘technopols’ (Dominguez 1997, 2) for this reason—if a rather naïve one, insofar as it sought to substitute a Saint-Simonian ‘administration of things’ for the usual business of democratic politics. And the project certainly encountered popular resistance, though it is mistaken to reduce the diversity of popular mobilization over the period to a simple backlash against neoliberalism (Silva 2009). But the far more important point is that neoliberal economic prescriptions had a wide range of political effects that are intrinsic to the construction of a new and distinctive mode of oligarchic rule; and these political effects were determined not only by the content of the policies themselves but, crucially, by the way they were implemented by the agencies and apparatuses of the patrimonial State. Contrary to the goal of rational and efficient governance, this created a new range of exclusionary mechanisms that served to disempower popular organizations while reinforcing and eventually transforming oligarchic rule.15 If the neoliberal project is deemed to have failed, even on its own terms, this was largely owing to its misdiagnosis of the region’s economic malaise. It was not the excessive bureaucratic power of the State that held back the region’s entrepreneurial energies, but the state’s penetration and capture by oligarchic actors, leading to its predatory tendencies and the lack of ‘embedded autonomy’ (Evans 1995). In the absence of a state administration capable of generating and sustaining public goods— an independent judiciary, high standards of public health and welfare, an effective public school system and other public-regarding policies (Doyle 2016, 38)—the attacks on the public sector exacerbated existing patterns of social and political exclusion, while massively strengthening the ‘structured inequality’ (Foweraker 2018, 91–92) that combines concentrated wealth and political power in Latin America. It has been argued that neoliberal policies have different effects across regionally distinct forms of capitalist economy (Hall and Soskice 2001), with Latin America best described as a ‘hierarchical market economy’ (Schneider and Soskice 2009; Schneider 2013) that relies heavily on segmented labour markets with large informal sectors employing a preponderance of low-skilled and

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poorly educated workers. The bulk of the assets of such an economy are highly concentrated in hierarchically organized and diversified corporate conglomerates, often tied to multinational firms (Schneider and Soskice 2009); and these ‘economic power groups’—a modern version of C. Wright Mills’ ‘power elite’ (Wright Mills 1956)—are structured by the family ties and political networks that subsist and expand within the administrative agencies of the patrimonial State. The patrimonial state in Latin America is a constant presence in the construction of oligarchic rule. But the new neoliberal mode of oligarchic rule is different from that of the oligarchic republics of the nineteenth and early twentieth centuries or the variably democratic republics of much of the twentieth century. It is not just that most important oligarchic actors are not now landowners or that they do not mainly advocate laissez-faire economics or that today they tend to be local conglomerates operating in alliance with multinational corporations. In sum, it is not about the changing character of oligarchic actors so much as the mechanisms that are deployed to achieve the degree of political exclusion that is required for the reproduction of oligarchic rule. The continual challenge of containing popular mobilization no longer relies on legal exclusions such as constrictions on the franchise, or corporatist co-optation, or even primarily recourse to repression—though this remains an essential component of the political repertoire of oligarchic rule. Rather it is the effects on governance of the apparently innocuous reforms to the labour market, and the motley of liberalizing reforms aiming to promote competition, that now serve to disrupt collective action by disorganizing the popular sectors—organized labour among them—and stymy their attempts to achieve effective representation (Foucault 2004; Brown 2015; Drinot 2014, 171). The net effect of this diffusion of market mechanisms is a radical reduction in the capacity of popular mobilization to contest and counterbalance the structured inequality that characterizes oligarchic rule. But the promotion of markets does nothing to diminish the oligopolies, cartels, price fixing, predatory practices, lobbying, influence peddling and other non-competitive and even criminal arrangements achieved by major corporations through their insertion into the administrative apparatus of the patrimonial State. In this way oligarchic competition continues untrammelled through ever more exotic forms of rent-seeking, even as oligarchic interests overall are protected by the newly minted exclusionary mechanisms of the new mode of oligarchic rule (Crabtree and Durand 2017; Durand 2018; Teivainen 2002).

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In a small minority of countries, the survival of organized labour and the persistence of programmatic left-leaning parties may still ensure some autonomous response to the political effects of neoliberalism; while the formal rules and procedures of democracy continue to require recurrent mobilization in the electoral arena, where oligarchic actors must seek to compete for popular support. Paradoxically, despite their overriding objectives of defending their wealth and entrenching their power, they must seek this support among the most destitute and vulnerable voters, who face the constant threat of losing the little that they have to inflation and economic crisis. This is a core constituency for the recurrent populist insurgencies across the region, and many such insurgencies have served directly to bolster oligarchic interests, either in conformity to their stated goals, as in the recent campaigns of Sebastián Piñera in Chile or Jair Bolsonaro in Brazil, or by switching their policy priorities once elected to office, as in the cases of Alberto Fujimori in Peru, Carlos Menem in Argentina and Carlos Ándres Pérez in Venezuela.16 But even where populist movements are driven by a consistently anti-oligarchic animus, they can and usually do serve to reproduce oligarchic politics, as the trajectory of the Chavista movement in Venezuela amply demonstrates17 ; and this routinely returns national legislatures to oligarchic control. This preponderance of populist politics derives both from the effects of structured inequality as expressed in the precarity and insecurity of the dispossessed, and from the disorganization of the popular sectors promoted by neoliberal policies. The latter opens the way to clientelism, vote-buying and a politically permissive rhetoric than promises an end to corruption and insecurity. This is the process that impels the political cycles of the neoliberal era in Latin America. Where oligarchic rule is secure it tends to rely increasingly on technocratic market-based solutions to ensure economic growth; but when the neoliberal reforms fail to reach the promised land of prosperity and security, popular disappointment can quickly turn to frustration, anger and a rising tide of popular protest. In the instances of Latin America’s ‘left-turns’, the progressive parties drew on multi-class alliances to oppose the easy consensus among technocrats and ‘economic power groups’. These alliances were analogous to the defensive alliance of the popular sector in Argentina over the period 1955–1976: they had the capacity to disrupt the neoliberal project in the short term, but lacked the potential to develop an alternative project that did not depend on the distribution of rents from commodity exports, and their defensive nature

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left them exposed to economic downturns. As in the Argentine case, each swing of the pendulum hampered progress towards sustained growth and democratic stability. The pendular shifts and political cycles of that volatile period in Argentine history were punctuated by the military dictatorship of 1976–1983 but have recurred throughout the democratic years that followed. It was the hyperinflation arising from the heterodox policies of the Alfonsín administration (1983–1989) that provoked the first such radical shift to the hard-line neoliberal policies of Carlos Menem (1989–1999). Menem was able to pursue an ambitious package of neoliberal reforms despite his Peronist lineage because of his party’s weakly institutionalized partyunion linkage that was dismantled in favour of a new constituency of middle-class voters, while deploying clientelism to ‘appeal to the heterogeneous strata of urban unemployed, self-employed, and informal sector workers’ (Levitsky 2005, 195) that were the result of his reforms. At the heart of these reforms was the Convertibility Plan that tamed inflation by tying the exchange rate to a basket of international currencies and paved the way for an extensive privatization of State assets. Business interests at home and abroad lauded Menem’s apparent success, while ignoring the enormous transfer of assets from public ownership to the country’s financial oligarchy. The defence of oligarchic interests maintained the Convertibility Plan in place even as Argentina lost competitiveness, so precipitating the banking crisis of 2000 and the ensuing economic meltdown. The economic crisis was accompanied by a year or more of intense popular mobilization and political volatility that eventually swung the pendulum back from neoliberalism and towards heterodox and expansionary economic policies under Néstor (2003–2007) and Cristina Fernández de (2007–2015) Kirchner, the standard-bearers of a more traditional Peronist approach to the economy. High rates of tax on agricultural exports allowed for redistributive policies that supported Peronism’s clientelist networks in the key constituencies of Buenos Aires, the taxes on soy exports proving to be less politically sensitive than taxes on wheat and beef in times past (Richardson 2009). But the eventual return of inflation and rising levels of international debt at punitive rates of interest—and the political tensions arising from rekindled conflict with the rural sector and widespread corruption—precipitated yet another swing of the pendulum back to orthodoxy and austerity as Macri, elected

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in 2015, was obliged by the international credit markets to balance the budget and stabilize the currency. On the surface the pendular swings that accompany these cycles of economic crisis and temporary recovery might appear to be the simple result of economic mismanagement. But the erratic economic policymaking is itself a reflection of the pattern of oligarchic competition and shifting alliances between oligarchic and popular actors that routinely finds expression in populist mobilization. Menem’s about-turn to neoliberal policies in the 1990s depended on the same clientelist mechanisms as those later supporting the left turn under the administrations of Néstor and Cristina Kirchner (Etchemendy and Garay 2011, 285), demonstrating that economic reform alone cannot put an end to these cycles of populist mobilization and oligarchic reaction. The Kirchners pursued pro-labour policies, reaffirming the links with the weakened unions, while seeking to extend clientelist ties to informal groups like the piqueteros. Macri, in stark contrast, adopted a typically pro-oligarchic stance by rescinding the tax on soy and other agricultural products and devaluing the peso; while economic contraction and inflationary pressures impelled yet another cyclical shift to the left in the 2019 elections. Treated separately these cycles may simply appear as the contingent results of electoral fortune, but taken together over the longer term, they tell a much bigger story about the antagonistic but mutually reinforcing relationship between oligarchic power and populist insurgency. Above all else it is this relationship that defines the conduct of democratic politics in Argentina, and, in greater or lesser degree, of many other countries across the region; and for this reason Argentina provides a ‘crucial case study’ (Eckstein 1975) for this general inquiry into modes of oligarchic rule in Latin America.

The Nature of Latin American Democracy The previous chapter provided a brief examination of Aristotle’s ethical view of oligarchic rule as ineluctably exclusionary. Mainly for this reason in The Politics he advocated an admixture of oligarchic and democratic rule—a combination he called polity or politeia—as possibly the best way to achieve good government in conditions of inequality (Foweraker 2018, Chapters 1 and 5). But Aristotle’s conception of democracy was so far circumscribed by a narrow definition of the demos and of the near

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confines of the urban polis that it bears little resemblance to democracy’s modern manifestations; while for him ‘polity’ was a matter of constitutional prescription and engineering, and therefore very different from the modern result of oligarchic survival into speciously inclusionary and constitutional democratic regimes. Since its independence the modern form of oligarchic rule in Latin America has been expressed in three principal modes: first in the oligarchic domination of the oligarchic republics of the nineteenth and early twentieth centuries, notwithstanding their occasional and partially democratic features; second in the partial disciplining of oligarchic competition within the variably democratic republics post-1930, broadly writ; and finally in the neoliberal mode, where the reproduction of oligarchic rule has required the disguised deployment of market-based exclusionary mechanisms to resist the rights culture, the mobilized publics and the multiple pressures for inclusion of the constitutionally democratic regimes of the contemporary era. In the first mode, the default mechanism of exclusion was repression, while the characteristic exclusionary strategy of the second mode was the combination of state-led, corporatist co-optation with top-down populist politics to control the urban and rural working classes. In the neoliberal mode, populism remains important to the reproduction of oligarchic rule, but not simply as a mechanism of control. On the contrary, it acts as a surrogate and illusionary form of inclusion that expresses the recurrent tensions between oligarchic rule and democratic struggles for representation and accountability. The increasing incidence and wider spread of populist mobilization drives the higher frequency of political cycles—most of them electoral but others impelled by ‘interrupted presidencies’ (Marsteintredet and Berntzen 2008)18 —that characterize the exercise of democratic government across the continent, so making populism the normal politics of Latin American democracy. In this way the inquiry into modes of oligarchic rule leads directly to a new and different interpretation of the nature of democracy in Latin America, because its democratic governments have to accommodate oligarchic rule, which in turn depends on the pervasive presence of the patrimonial State; and the modus operandi of the State directly invalidates the primary premises of democratic theory. As discussed at length in the previous chapter, the public sphere is not a separate and pristine domain of democratic values and politics, and public administration is not

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neutral, effective or ‘legal-rational’; while formal rules are—as it were— insufficient to sustain a procedural democracy as they can only work in combination with informal rules, not least in order to constrain and civilize oligarchic competition in some degree. One possible and radical inference from these observations is that corruption is now a necessary and emblematic feature of Latin American democracy, an inference that finds widespread corroboration in the spate of extensive corruption scandals that have beset nearly all the countries of the continent—not least Argentina, where the governments of the Kirchnerista period appear to have operated as a massive ‘machine of spoliation’ (Pareto 1991). This reading of the nature of democracy in Latin America may seem excessively gloomy, even cynical. But nothing in this analytical approach either endorses the rapaciousness of the rich or diminishes the importance of democratic values and democratic struggles. In Aristotle’s ethical view there is no virtue in government by the wealthy few in their own exclusive interest, and oligarchic rule will always be corrupt in the sense that it concedes no place for the kind of politics that is possible only among citizens who live freely together as equals. This politics requires a capacity for deliberation and a pursuit of the proper aim of government that is the good life; and it takes leaders who understand that wealth has virtue only as a means towards this end. The neoliberal mode of oligarchic rule runs counter to this view of good government in prioritizing policies to maximize competition and growth at the expense of any other goal of public policy; while the political effects of these policies insulate them from democratic deliberation, and sacrifice the interests of the many to the advantage of the few. The costs of these exclusionary policies are all too evident in the glaring gap between those at the top and those at the bottom of the social order. While those at the top enjoy excellent education, health provision, housing and leisure opportunities, those at the bottom struggle to secure the bare means of subsistence, lack access to basic public goods and fundamental legal protections, and therefore cannot claim the rights of full citizenship. The potency of populist politics is confected from promises to close this gap, or at least put an end to corruption and the daily indignities and discrimination that blight the lives of the poor and dispossessed.

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Notes 1. O’Donnell’s account of Argentine exceptionalism serves to prove the rule not by arguing against the importance of oligarchic alliances or the challenges of State formation, but by demonstrating that the resolution of these challenges in Argentina derived from the ascendancy of the pampa bourgeoisie which underpinned the early achievement of a national State which was able to access international capital on some scale. O’Donnell is clear that this was largely owing to a far more homogeneous economic environment than in the rest of Latin America (except perhaps for Uruguay) and especially the absence of a traditional peasantry (O’Donnell 1978). As the subsequent discussion of O’Donnell’s argument will suggest, the highly patrimonial character of the Argentine State helps explain why Argentina, unlike Uruguay and Chile, had a very difficult time establishing a stable pattern of domination in the twentieth century. 2. The emergence of these republics could only occur where the challenge of oligarchic competition had been resolved through the achievement of some form of governing alliance. In Brazil the alliance between the regional oligarchies of São Paulo and Minas Gerais was described as the politics do café com leite, and analogous arrangements were reached in Chile (after a temporary breakdown in the 1890s), Peru, Colombia and (following O’Donnell’s ‘national state’ model) Argentina and Uruguay. Among the exceptions were Cuba, which was engaged in the struggle for independence, the countries of Central America, and Mexico, which moved from the dictatorship of the porfiriato to violent conflict between regional oligarchies throughout the revolutionary wars. 3. It is so easily forgotten that the travails of democratization have been universal. Just eleven democracies survived worldwide at the low point of the ‘first wave’ of democratization in 1942 (Huntington 1991). 4. The focus here is almost exclusively on lo oligárquico but the story of lo popular in this period would prove equally varied and complex, ranging from messianic movements in the Brazilian countryside to revolutionary movements in the south of Mexico, and from a rapid expansion of the franchise and highly competitive electoral politics in Argentina after 1916 to the clientelist incorporation of a broad political public through the Batllista project in Uruguay, not to mention the syndicalist and anarchist influence on labour union activity, especially in the countries of mass European immigration. The subsequent history would have to encompass the variable but important extension of the franchise from the 1930s to the 1960s, the diverse populisms of Brazil, Argentina, Mexico, Ecuador, Colombia in late 1940s, Chile in the 1950s and Peru in the 1980s, and the national-popular liberation movements in Nicaragua in the 1930s, Cuba in 1959 and Nicaragua again in 1979.

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5. In Brazil the landowning ‘colonels’ of the North-East of the country would reliably deliver the voto de cabresto (the cabresto being a herd of cattle), and in Mexico the staffers of the PRI, the Institutional Revolutionary Party, would truck in its voters to the voting stations, the acarreados, and pay them with food, drinks or even cash. 6. In subsequent years these populist governments tended to succumb to military coups, and the ensuing authoritarian regimes severely curtailed civil, political and even social rights. The so-called national security regimes of Brazil and Chile, for example, sought legitimacy through a hard-line anti-communist stance, and rapid but concentrated economic growth, untrammelled by labour unions or political parties and spearheaded by direct foreign investment and transnational corporations. In these circumstances, any legitimacy was narrowly based, accountability was almost non-existent, and the only form of effective participation was the few social movements and protests that could survive the political clampdown. The exceptions were Cuba in 1959 and Nicaragua in 1979, where national-popular movements took arms against what they saw as a corrupt combination of oligarchic and imperialist interests. 7. It was the combination of oligarchic and imperialist interests which shaped the situations of dependency first identified and described by Carlos Mariátegui (1971) in Peru. 8. In this variant of state corporatism, social rights become a constricted form of representation and a surrogate for citizenship rights. 9. Even in this tightly controlled context populist mobilization could prove disruptive, as demonstrated by the accession of Guillermo Billinghurst to the presidency of Peru in 1912. 10. Douglass North’s category of a ‘ruling coalition’ is broader than the notion of an oligarchic alliance and may include non-oligarchic actors such as the military, the technocrats and even organized labour. In North’s view a stable ruling coalition is required to impose a rule-based order because, in an historical perspective, any rules are better than no rules for economic development (North 1981). 11. In this account, the state became balkanized and fragmented as it was colonized by different oligarchic sectors and fractions. 12. O’Donnell referred to this oligarchy as a bourgeoisie, possibly to distinguish it from the labour-repressive landowning oligarchies of the Andes, Brazil or Mexico. 13. It is instructive to compare O’Donnell’s account with that of Carlos Waisman (1989). Waisman argues that the early emergence of democracy prior to 1930 was owing to a sustained rate of economic growth that allowed for ‘the absorption of mass immigration, rapid urbanization and industrialization, expansion of education, and high standards of living for the lower classes’; while middle-class demands and intense

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15. 16.

17.

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labour mobilization were absorbed by the ‘elites’ through inclusionary strategies. Subsequently, these promising developments were stymied by the presence of recalcitrant oligarchies which opposed the subordinate classes and sought to prevent the emergence of democratic institutions, even as they fought for control of the developmental State. It is a similar story, but without the analytical edge provided by the focus on oligarchic competition it fails to explain the cyclical nature of the ‘catastrophic equilibrium’. The specific nature of Peronism does not figure largely in O’Donnell’s account, but its resilience and longevity are important to the cyclical confrontations that mark the period. Despite the absence of a large pool of peasant labour, the speciously inclusionary logic of Peronism was first read—by Gino Germani for example—as a simple response to the influx of descamisados (shirtless ones) from the countryside (Germani 1978). Subsequently, Murmis and Portantiero demonstrated that Peronist mobilization and support depended on the deeply clientelist and informally corporate nature of its organization (Murmis and Portantiero 2011). These created the deep roots and political loyalties that would ensure its survival. The impact on populism is a topic that has been more thoroughly discussed elsewhere. See, for example, Roberts (1995). Leaders aligned with oligarchic interests have won support among broader electoral constituencies by appealing to religious communities (particularly evangelicals), exploiting prejudices against minorities and threatening violence against their opponents—with a negative impact on the human rights of the poor (Landman 2016, 147). Hugo Chávez had promised a Bolivarian Revolution when he came to power as the leader of a populist movement with socialist pretensions. But the result was the creation of what critics dubbed a new boligarchía that encompassed finance capital, oil interests and senior military officials. Over time this became a rapacious oligarchy entrenched within a kleptocratic State that has reduced this formerly prosperous and peaceful country to economic ruin, political violence and popular despair. Interrupted presidencies refer to the frequent moments in this neoliberal period when executives have failed to complete their mandate (Marsteintredet and Berntzen 2008; Llanos and Mainstrendet 2010). Every instance of such interruption, bar none, has been accompanied by high levels of social mobilization and, in the great majority of the cases, street protests; while the solutions to the crises responsible for the interruptions often involve para-constitutional practices or de facto political fixes that anticipate and possibly precipitate de jure reforms (Llanos and Mainstrendet 2010).

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References Anderson, Benedict. 1983. Imagined Communities: Reflections on the Origins and Spread of Nationalism. London: Verso. Brown, Wendy. 2015. Undoing the Demos: Neoliberalism’s Stealth Revolution. New York, NY: Zone Books. Collier, Ruth Berins, and David Collier. 1991. Shaping the Political Arena: Critical Junctures, the Labor Movement, and Regime Dynamics in Latin America. Princeton, NJ: Princeton University Press. Crabtree, John, and Francisco Durand. 2017. Peru: Elite Power and Political Capture. London: Zed Books. Dahl, Robert. 1971. Polyarchy: Participation and Opposition. New Haven, CT and London: Yale University Press. Dominguez, Jorge I. 1997. Technopols: Ideas and Leaders in Freeing Politics and Markets in Latin America in the 1990s. In Technopols: Freeing Politics and Markets in Latin America in the 1990s, ed. Jorge Dominguez. University Park, PA: Penn State University Press. Doyle, David. 2016. State Capacity and Democratic Quality. In Democracy and Its Discontents in Latin America, ed. Joe Foweraker and Dolores Trevizo. Boulder, CO: Lynne Rienner Publishers. Drinot, Paulo. 2014. Peru in Theory, 1st ed. New York, NY: Palgrave Macmillan. Durand, Francisco. 2018. Odebrecht: La empresa que capturaba gobiernos. Lima: Oxfam & Fondo Editorial Pontificia Universidad Católica del Perú. Eckstein, Harry. 1975. Case Study and Theory in Political Science. In Handbook of Political Science: Strategies of Inquiry, vol. 7, ed. F. I. Greenstein, and N. S. Polsby, 79–137. Reading, MA: Addison-Wesley. Etchemendy, Sebastián, and Candelaria Garay. 2011. Argentina: Left Populism in Comparative Perspective 2003–2009. In The Resurgence of the Latin American Left, ed. Steven Levitsky and Kenneth Roberts, 283–305. Baltimore, MA: Johns Hopkins University Press. Evans, Peter. 1995. Embedded Autonomy: States and Industrial Transformation. Princeton, NJ: Princeton University Press. Foucault, Michel. 2004. The Birth of Biopolitics: Lectures at the Collège de France, 1978–1979. New York, NY: Palgrave. Foweraker, Joe. 1978. The Contemporary Peasantry: Class and Class Practice. In International Perspectives in Rural Sociology, ed. Howard Newby. Chichester: Wiley. Foweraker, Joe. 2018. Polity: Demystifying Democracy in Latin America and Beyond. Boulder, CO: Lynne Rienner Publishers. Germani, Gino. 1978. Authoritarianism, Fascism, and National Populism. New Brunswick, NJ: Transaction Books. Gilbert, Dennis. 2017. The Oligarchy and the Old Regime in Latin America, 1880–1970. Lanham, MD: Rowman & Littlefield.

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Gramsci, Antonio. 1973. Selections from the Prison Notebooks, eds. Quintin Hoare and Geoffrey Nowell-Smith. London: Lawrence and Wishart. Hall, Peter A., and David Soskice (eds.). 2001. Varieties of Capitalism: The Institutional Foundations of Comparative Advantage. Oxford: Oxford University Press. Huntington, Samuel P. 1991. The Third Wave: Democratization in the Late Twentieth Century. Norman: University of Oklahoma Press. Landman, Todd. 2016. Democracy and Human Rights. In Democracy and Its Discontents in Latin America, ed. Joe Foweraker and Dolores Trevizo. Boulder, CO: Lynne Rienner Publishers. Levitsky, Steven. 2005. Crisis and Renovation: Institutional Weakness and the Transformation of Argentine Peronism. In Argentine Democracy: the Politics of Institutional Weakness, ed. Steven Levitsky and Victoria Murillo. Pennsylvania, PA: Penn State University Press. Llanos, Mariana, and Leiv Marsteintredet. (eds). 2010. Presidential Breakdowns in Latin America: Causes and Outcomes of Executive Instability in Developing Democracies. London: Palgrave Macmillan. Mariátegui, José Carlos. 1971. Seven Interpretive Essays on Peruvian Reality, trans. Margory Urquidi. Austin, TX: University of Texas Press. Marshall, Thomas Humphrey. 1992 [1950]. Citizenship and Social Class. London: Pluto Press. Marsteintredet, Leiv, and Einar Berntzen. 2008. Reducing the Perils of Presidentialism in Latin America through Presidential Interruptions. Comparative Politics 41 (1): 83–101. Mazzuca, Sebastián L. 2010. Access to Power vs Exercise of Power: Reconceptualizing the Quality of Democracy in Latin America. Studies in Comparative Development 45 (3): 334–357. Murmis, Miguel, and Juan Carlos Portantiero. 2011. Estudios sobre Los Orígenes del Peronismo. Buenos Aires: Siglo Veinteuno Editores. North, Douglass C. 1981. The Neoclassical Theory of the State. In Structure and Change in Economic History, 20–32. New York, NY: Norton. O’Donnell, Guillermo. 1978. State and Alliances in Argentina, 1956–1976. Journal of Development Studies 15 (1): 3–33. Pareto, Vilfredo. 1991. The Rise and Fall of Elites: An Application of Theoretical Sociology. New Brunswick: Transaction Publishers. Posada-Carbó, Eduardo. 2008. Democracy. In The Encyclopaedia of Latin American History and Culture, 2n ed., ed. Jay Kinsbruner, 768–791. Detroit: Charles Scribner & Sons. Posada-Carbó, Eduardo. 2017. Congresses versus Caudillos: The Untold History of Democracy in Latin America, with special emphasis on New Granada (Colombia), 1830–60: A new research agenda. Parliaments, Estates and Representation 37: 2, 119–129.

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Przeworski, Adam. 2012. Latin American Political Regimes in Comparative Perspective. In Routledge Handbook of Latin American Politics, ed. Peter Kingstone, and Deborah J. Yashar. New York, NY and London: Routledge. Richardson, Neal P. 2009. Export-Oriented Populism: Commodities and Coalitions in Argentina. Studies in Comparative International Development 44 (3): 228–255. Roberts, Kenneth M. 1995. Neoliberalism and the Transformation of Populism in Latin America: The Peruvian Case. World Politics 48 (1): 82–116. Schneider, Ben Ross. 2013. Hierarchical Capitalism in Latin America: Business, Labor, and the Challenges of Equitable Development. New York, NY: Cambridge University Press. Schneider, Ben Ross, and Peter Soskice. 2009. Inequality in Developed Countries and Latin America: Coordinated, Liberal and Hierarchical Systems. Economy and Society 38 (1): 17–52. Schumpeter, Joseph. 1943. Capitalism, Socialism, Democracy. London: George Allen and Unwin. Silva, Eduardo. 2009. Challenging Neoliberalism in Latin America. New York, NY: Cambridge University Press. Teivainen, Teivo. 2002. Enter Economism, Exit Politics: Experts, Economic Policy, and the Damage to Democracy. London: Zed Books. Waisman, Carlos H. 1989. Argentina: Autarkic Industrialization and Illegitimacy. In Democracy in Developing Countries: Latin America, vol. 4, eds. Larry Diamond, Juan J. Linz, and Seymour Martin Lipset, 59–109. London: Adamantine Press. Weber, Max. 1978. Economy and Society: An Outline of Interpretive Sociolog y, ed. Guenther Roth and Claus Wittich. Berkeley, CA: University of California Press. Wright Mills, Charles. 1956. The Power Elite. New York, NY: Oxford University Press.

PART II

Modes of Oligarchic Rule in the United States

CHAPTER 4

First Mode—The Federal Patrimonial State

Abstract This chapter describes the first mode of oligarchic rule in the United States as it emerged from the narrowly oligarchic and strongly federal nature of the Constitution, with a focus on the extensive scope accorded to states’ rights and powers in the initial absence of a federal administrative State. What was not foreseen in the Constitution was the growth of political parties and party patronage as the means of oligarchic manipulation of politics and policymaking in the localities. Together these tendencies led to a sui generis pattern of patrimonial party-State formation that promoted a combination of a constricted but competitive representative politics with the ruthless exclusion of poor whites, women and racial minorities. The chapter further explains how the core features of this mode of rule, namely its private influence over public affairs and its exclusionary capacities, survived the Civil War and Reconstruction. Keywords Constitution · Federalism · State · Parties · Patronage

The Founding of the Oligarchic Republic States born of revolution routinely create mythical accounts of their origins. But no such account has ever been so compelling and pervasive as the American myth of the birth of a democratic republic. Over © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 J. Foweraker, Oligarchy in the Americas, https://doi.org/10.1007/978-3-030-63146-8_4

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the years this myth has given rise to a powerful political symbolism and a quasi-religious belief in the democratic virtue of the people and the nation (Stimson 2004, 170), so that any objection to the democratic creed is seen as unpatriotic and un-American (Dahl 1961, 317). This ‘civil religion’ (Eisenstadt 2002, 35–36) underpins the conviction that American democracy is exceptional and indeed superior to other democracies, and, contrariwise, obscures the wide variation in America’s democratic character over time, across regions, and among different groups of citizens and non-citizens. At the heart of the myth, and rooted in the historical moment of revolutionary conflict, is the democratic ideal of popular sovereignty, whereby political power will be derived directly from the people—an ideal indicted as ‘the most important false hope in American history’ (Morone 1998, 30). Yet, despite the historical evidence against it, the enduring resonance of the myth of the founding has sustained ‘cheerful illusions’ and wishful thinking about American democracy ever since (Achen and Bartels 2016, 20). Contrary to the myth, the founders of the republic were mainly concerned with effective not popular government. The term democrat was still a term of abuse at the time, and they viewed the spread of popular assemblies in the confusion of war and its aftermath with alarm (Beeman 2006, 1–7). George Washington sought to avoid tyranny but not establish democracy, while Thomas Jefferson never referred to democracy either before or after his election to the presidency in 1800. Jefferson provided the political manifesto for the new republic in the Declaration of Independence and fought against ‘aristocrats’ and ‘monocrats’, but his republicanism focussed increasingly on a virtuous and vigilant citizenry as defenders of liberty, not on popular government (Onuf 2000, 4–7); while Washington presided over the Philadelphia Constitutional Convention of 1787 which set in place ‘strong institutional filters’ (Carwardine 2018, 6) on the powers of ordinary citizens. It was understood that the business of government would be conducted by gentlemen trustees, and it was not until the 1820s that Martin van Buren began to argue that party loyalty not wealth or family distinction should decide how votes were cast. The seal was set on these institutional arrangements by the ‘truly historic event’ of the presidential election of 1800 (Carwardine 2018, 7), when one party of government peacefully replaced another, so vindicating the principle of a legitimate opposition. The framers of the Constitution did not always agree among themselves about the constitutional provisions, but, by and large, they got

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the Constitution that best suited their interests, and one that worked to curtail any aspiration to democratic government. Any law passed by the elected legislature had also to be agreed by the appointed grandees of the Senate—chosen by state legislatures—as well as by the president who was himself elected by another group of grandees in the Electoral College (Steinmo 2010, 164). Moreover, the constitutional order was neither inclusive nor egalitarian with representation restricted to a relatively small community of white, propertied males, and the rights enshrined in the Bill of Rights failing to include poor whites, women and slaves. This was not a democratic ideal but an ideal of governance as patriarchal authority over households (Ritter 2009) that fell far short of the key principle of equality as expressed in the Declaration of Independence. Nowhere was this truer than in the framers’ original sin of ignoring the question of slavery, leaving it to the House of Representatives to vote against the regulation of slavery and the slave trade in 1790, by twenty-nine to twenty-five votes. The result of this failure was that racial discrimination of all kinds was legal and common practice for most of America’s political history. Alexis de Tocqueville’s odd judgement that ‘Americans were born equal without having to become so’ (Tocqueville 1946) failed to recognize the deeply unequal treatment of slaves and women mandated by a Constitution framed by white male slaveowners.1 But, for all its many flaws of principle and democratic failings, the Constitution has been defended for the virtue of establishing a clear set of political rules and a framework of political procedures for the practice of stable government, all of them codified in a written document that could be actively interpreted in subsequent years by an authoritative and assertive Supreme Court (Whitehead et al. 2009, 247). In other words, even if the Constitution was not very democratic—more Madisonian than populistic in Dahl’s words (Dahl 1956)—it did embody checks and balances across its institutional components that might allow for later expansion of its democratic content; and, to make the point, by the time of Jefferson’s death in 1826 the franchise had been extended to most if not all white males. This defence recalls Zakaria’s argument that the success of modern democracies in the Western Hemisphere has largely been owing to their constitutional rather than their popular components (Zakaria 1997, 27), but the ‘constitutional liberalism’ he advocates has been compromised over the course of American history by the radically federal nature of its Constitution.

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A strong form of federalism was part of the original constitutional design, and the Bill of Rights—the first ten amendments to the Constitution—was part of a federal political structure where the states were the primary representatives of local political interests and rights were vested in state citizenship, with the Bill providing protections and immunities against a potentially overbearing federal State. Every state was guaranteed a republican form of government, but the Constitution left the individual states in charge of all legislation not reserved to the federal level, including the rules and organization of elections to state legislatures.2 Critically, these provisions not only allowed the states to legislate on slavery but also equipped them to disenfranchise freed slaves in the period following Reconstruction. More generally, these ‘competing jurisdictions and divided allegiances’ (González and King 2004) were enabling rather than constitutive, creating multiple opportunities for local oligarchies to organize and control state politics in an exclusionary and authoritarian manner. The early adoption of near-universal white male suffrage meant that the states’ electoral politics could often be competitive and rambunctious, but state legislatures remained under the control of the oligarchs, especially in the South; and despite the popular tendencies of Andrew Jackson’s Democratic Party, its devotion to states’ rights seemed to guarantee slavery in perpetuity. Thus, strong federalism in the absence of a strong central State administration left the republic looking like a Swiss cheese, perforated by pockets of oligarchic, authoritarian and often racist domination. Although Madison first identified the ‘mischief of faction’ in Federalist 10, only much later in Federalist 51 did he famously justify America’s fragmented constitutional structure as a means of curing it. Contrary to classical teachings, republican government could make its peace with interest and ambition. Liberty would not depend on civic virtue but instead on a scheme of mechanisms and procedures by which competing interests would check and balance each other (Sandel 1996, 130). ‘Ambition must be made to counteract ambition. The interest of the man must be connected with the constitutional rights of the place’. It was to achieve this that in the ‘compound republic of America, the power surrendered by the people is first divided between two distinct governments, and then the portion allotted to each subdivided among distinct and separate departments’. In other words, power was diffused across the federal and state governments and then further divided between the legislative, executive, and judicial branches (Taylor et al. 2014, 38). But

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despite his preoccupation with faction—‘if men were angels, no government would be necessary’—and the huge constitutional effort invested in containing it, Madison and his fellow founders quite failed to foresee how parties and interest groups would emerge within the American political system, still less the key role they would play within it. In one view the emergence of political parties proved essential to the very survival of the Constitution because its carefully balanced institutional structure was not foolproof, and required innovations such as parties for it to work in practice (Levitsky and Ziblatt 2018, 211). At the same time, however, it was soon evident that the parties that came to shape the political landscape of nineteenth-century America tended to reintroduce interest and faction by the back door. The rudimentary federal bureaucracy created by the Jackson administrations was placed at the disposal of political parties and came to form the cornerstone of a party-State where public officials depended for their jobs on party patronage. The gentlemen trustees were now party leaders who conducted their affairs in consort with oligarchies at state level, bound both by common interest and party loyalty. Madison believed that ‘the most common and durable source of factions has been the various and unequal distribution of property’ (Hacker and Pierson 2010, 76). But it was his fellow founder Thomas Jefferson who believed most fervently in an agrarian society with a roughly equal distribution of property as conducive to the creation of a public good beyond the sum of private interests, comprising the self-reliant citizens that self-government requires. The argument against domestic manufactures was therefore more moral and civic than economic and made with the formative republican and Aristotelian ambition of achieving the ‘good life’ (Sandel 1996, 142). At this distance Jefferson’s ambition looks utopian, but it must have looked more realistic in the America of the founding, where a very low income/capital ratio meant social and economic inequalities were similarly low compared with Europe and the influence of landlords and accumulated wealth correspondingly slight (Piketty 2014, 152). Alexis de Tocqueville was more accurate in this regard when noting in 1840 ‘that the number of large fortunes is quite small, and capital is still scarce’—though Piketty is clear that economic inequalities grew rapidly over the course of the nineteenth century.3 But Jefferson’s moral crusade had begun in the early years of the republic in the public feud he, as Secretary of State in the Washington administration, waged with Alexander Hamilton, the Secretary of the Treasury.

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Hamilton favoured a stronger federal government that could make sufficient credit available to fund entrepreneurial activity and pressed for a federal banking system to make this possible; while Jefferson was viscerally opposed to banks in general, characterizing them as ‘more dangerous than standing armies’ and judging the advocates of federally chartered banks to be guilty of treason. It will become apparent that the tensions condensed in the feud between the two have endured throughout the course of America’s political history. Although political motives are always mixed, Jefferson could be as sensitive to the dangers of oligarchy as Madison and Washington were to the those of unbridled democracy. But in looking for ‘possible mechanisms of oligarchic influence’ it is the Constitution itself—‘a revered but hardly democratic document’—that ‘has imposed rules beyond the reach of simple majority control that may substantially facilitate oligarchy’ (Winters and Page 2009, 743). Looking first to the Senate, the constitutional principle that every state in the Union has an equal vote in the Senate—two senators—‘generates by far the greatest violation of the classic majority principle of “one person, one vote” of any federal democracy’ (Stepan and Linz 2011, 844). At the time of the Constitution’s framing, the ratio of the most populous to the least populous state was about 20-1. Today it is about 70-1, and this radical disparity makes the American Senate the most malapportioned of all upper houses anywhere. In this regard, it is noteworthy that the Senate has greater influence on federal appointments than the ‘one person, one vote’ House of Representatives, and more prerogatives than any other democratically elected Upper House. Its veto power to defeat reforms backed by a majority in the House has been demonstrated time after time, often as the result of an alliance of senators from less populous states (Taylor et al. 2014, 37).4 Over recent decades yet more power has accrued to the Senate through the increasing use of the filibuster that enables the blocking of win-sets by minorities. In place of a simple majority of 51 votes, a credible threat of a filibuster creates the need for a supermajority of 60 votes, while even single senators can produce gridlock through anonymous ‘secret holds’. These minority-induced vetoes are pernicious in the broader context of a Constitution that is truly exceptional in containing four electorally generated veto points (Stepan and Linz 2011, 844),5 enabling conservative blocking coalitions to protect oligarchic interests and prevent reform. In addition, the Fifth Amendment prohibits the federal government, and by the Fourteenth Amendment also the state governments, from depriving

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any person of property without the ‘due process of law’ and ‘just compensation’. The Constitution also provides for an appointed judiciary—with the Senate playing a leading role in the appointment of senior judges— that consistently enforces constitutional and statutory law in ways that protect the wealthy and powerful (Winters and Page 2009, 744). Last and possibly least, though potentially critical to the outcome of the presidential elections of 2000 and 2016, the distortions in the relative power of the individual states represented in the Senate also mean that there is some over-representation of the smaller states in the Electoral College, since each state has the same number of electoral votes as it has members in the House and Senate (Taylor et al. 2014, 42).

Party-State Patrimonialism The American Constitution was originally more oligarchic than it was democratic, but it did provide a framework for republican government prior to the formation of a federal administrative State (King and Lieberman 2009a). The American State of the ‘long nineteenth century’ (Gerstle 2009) was thought to be weak, certainly in comparison with the strong, regulatory State that emerged with the New Deal of the 1930s. It was also thought of as weak in comparisons with the European States of the time, but also distinctive in the strength of its constitutionalism, republicanism and federalism. But it is now accepted that nineteenthcentury America was far from ‘Stateless’, even though the formation of the State clearly differed from the European move away from absolutism (King and Lieberman 2009b). The key difference lay in the strong federalism of the Constitution. In the absence of an effective central State that could enforce a federally based rule of law, it was the individual states of the Union that took the lead in managing the business of government. It was their governments and their courts that kept political order and regulated economic activity and—certainly prior to the Civil War—they were expansive and interventionist in both these respects. The spending of state governments on public and mixed enterprise far exceeded that of the federal government in this period and they were prolific in chartering corporations to direct and control private investment (Gerstle 2009). The political capacity to do so was constitutionally sanctioned by the doctrine of police power that encompassed everything that could improve ‘the good and welfare of the Commonwealth’, including

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health, education, town planning and the social mores of the population. Indeed, the reluctance to specify the powers of the states under the 10th Amendment seemed to give them unlimited powers. The regulation and enforcement of the slave economy, especially in the South, were the most salient, but the practice of ‘civic republicanism’ could also include increased surveillance of the population and punishment for immoral or dissenting behaviour. This government by the ‘courts and parties’ (Skowronek 1982) of the states, the result of their ‘coming together’ type of federalism (Stepan and Linz 2011, 850), proved to be both effective and durable. But, notably, it did not tend to interfere with the activity of ‘private interests’ (Gerstle 2009). On the contrary, it expressed quite clearly the formation of a federated and party-based patrimonial State. The pattern of State formation in nineteenth-century America was shaped in large degree by highly organized patronage-based parties (Skowronek 1982). The importance of local patronage networks did not inhibit State formation, but the ‘extreme localism’ (Stepan and Linz 2011, 850) it manifested tended to place power in the hands of oppressive local majorities, so that ‘in practice, localism has meant discrimination and inequality’ (King and Lieberman 2009a, 577). This conclusion applies a fortiori to the South because of its reliance on the slave economy. In broad terms, the North had a relatively egalitarian society with a relatively small endowment of capital, mainly because land was so abundant that virtually anyone could become a landowner, while recent immigrants had not had time to accumulate capital. But in the South ‘inequalities of ownership took the most extreme and violent form possible, since one half of the population owned the other half’ (Piketty 2014, 161), and slave capital largely supplanted and surpassed landed capital. More precisely, there were some four million slaves out of a total population of some ten million in the South in 1860, and there the combined market value of farmland and slaves exceeded six years of the Southern states’ income— almost as much as the total value of capital in Britain and France at the time (Piketty 2014,160). These different forms of inequality continued to influence policymaking over the long nineteenth century, with the white oligarchies of the South passing Jim Crow and anti-miscegenation laws and those of the North focussing their attention on anti-labour legislation (Cohen 2009). It may seem odd in retrospect that the founders’ original conception of a constitutional republic appeared to sit so comfortably with slavery, the exclusion of women from public life, with property qualifications for voting or even with nativist hostility to immigrants.

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But primitive republicanism had long accepted that civic virtue might correspond to fixed categories of birth or condition (Sandel 1996, 318). Just as Aristotle considered slaves, women and resident aliens unworthy of citizenship, so local nineteenth-century oligarchs, North and South, defended slavery and the several forms of political exclusion.6 At federal level, and especially during the Jackson administrations, policy was heavily influenced by the traditional republican fear of powerful, self-interested forces that might come to dominate government and secure special privileges, with Jackson’s emblematic stand against the Bank of the United States reflecting his belief that the threat of ‘interested politics’ came almost wholly from the ‘moneyed interest’. But this was counterbalanced by his vigorous defence of states’ rights, which left the party patronage networks of the local oligarchies intact and untroubled. But with the Civil War the balance of power between local state and Federal governments appeared to shift decisively in the favour of the latter. The Civil War itself greatly enhanced the administrative capacity of the federal government as it built the departments necessary to mobilize and supply the army, support industry and tax accordingly. With victory for the North assured, the federal government moved rapidly during Reconstruction to outlaw slavery and grant emancipation under the 13th Amendment and guarantee the newly emancipated slaves the right to vote under the 14th and 15th Amendments. The 14th Amendment also reserved the power to grant citizenship and enforce its rights to the federal government, defining citizens as ‘all persons born or naturalized in the United States’, establishing at the same time that no state may ‘abridge the privileges or immunities of citizens of the United States’ or ‘deprive any person of life, liberty, or property, without due process of law’ or deny to any person ‘the equal protection of the laws’. The 13th through 15th Amendments altered the whole complexion of the Bill of Rights by introducing a rights-conscious interpretation of the federal Constitution (Hartog 1987, 1017) and by linking the protection of civil and political rights to the expansion of federal power, so reversing entirely the original states-centred focus of the original Bill (Whitehead et al. 2009). Furthermore, in the same degree as the federal government was now seen as the defender of individual rights, so the state governments were viewed as a nexus of abusive political authority. Federal authority was further enhanced by the Homestead Act of 1862, the Freedmen’s Bureau—set up to integrate ex-slaves into the free economy—and the deployment of a range of welfare programmes for veterans of the war (Gerstle 2009). The

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immediate result of federal intervention was a high and stable turnout of both black and white voters throughout the 1880s (Tuck 2009). If the ‘long nineteenth century’ had stopped there, then Huntington’s assertion that the ‘long first wave of democratization’ began with the election of President Jackson in 1828 might have been unproblematic (Huntington 1991, 30). But, in the event, the apparent success of the federal incursions into states’ rights was short-lived. The first sign of this was the gradual but inexorable reversal of the erosion of the states’ police powers that had occurred in the immediate post-War years. In a series of judgements delivered in the 1870s and 1880s, the Supreme Court reaffirmed and expanded police powers to regulate alcohol, forcibly separate white and black populations, ban interracial marriage, polygamy, prostitution and contraception; and subsequently laws against miscegenation were passed not only in the South but also in the North and West (Gerstle 2009). But the most significant and salient sign was the dramatic disenfranchisement of black voters, especially in the South. In retrospect it appears as if this was rapidly executed. Disenfranchisement did not begin until 1890 in Mississippi, and in some states not until the turn of the century, but by 1908 virtually all black Americans in the South had lost the franchise through state-level constitutional amendments adopted by referenda or constitutional conventions (Tuck 2009). But although the end-game played out in just a few years, the assault on the black franchise began much earlier with speciously race-neutral measures like literacy or ‘good character’ or property requirements, and the cumulative impact of violence, fraud, gerrymandering and—in some states—the poll tax. White supremacists played on fears of rape and miscegenation to connect the franchise to racial tensions. Populist politicians in Louisiana and North Carolina sowed racial discord. And in Florida in 1876–78—in an uncanny foreshadowing of the presidential race of 2000—‘thousands of black voters were purged from the lists after being convicted of petty crimes’ (Tuck 2009, 140). This steady attrition of the black franchise prepared the ground for the legal disenfranchisement to come and demonstrated that Emancipation, far from having resolved the race question in America, had in fact created it by precipitating the State’s ‘deep and complex entanglement with patterns of racial classification, division and hierarchy’ (King and Lieberman 2009b, 313). Blacks in the South resisted the assault on their recently conferred political rights, but the savage inequalities of the post-Reconstruction South eroded this resistance. They lacked economic resources and had to

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keep moving to find work or work for themselves. Labour disputes tended to elide into racial conflicts, boosting white supremacist campaigns. Above all they faced the recurrent threat of violence. Mob lynchings found broad public support and some of them turned into public spectacles. So early efforts at collective self-defence became weaker as the balance of armed power shifted decisively to the whites. And then the Jim Crow segregation of transport, schooling and commerce towards the end of the century further ‘legitimized’ the suppression of the franchise (Tuck 2009). This nefarious result was certainly facilitated by federal State inaction. The Republican Party controlled the Congress, the executive and the Supreme Court of the time, but lacked any incentive to intervene, their dominance assured by their electoral support in the new Western states; and by 1896 they had abandoned black voters in the South (Gerstle 2009). But it was the federal courts and especially the Supreme Court that consistently stymied the possibilities for federal intervention and allowed segregation to flourish. This role of the federal State and the Supreme Court in accommodating and promoting the segregationist order did not stop once disenfranchisement was complete in 1908 but continued through the 1920s, the New Deal of the 1930s, and beyond, until there was absolutely no doubt that the State had become ‘an active racial segregator’ (King and Lieberman 2009c). Thus, public policies consistently supported affirmative action for whites in government departments and agencies and extended racial residential segregation (Katznelson 2005). It is allowed that Southern political control of Congress, and especially its key committees, presented a clear constraint on the federal government over these years. But this cannot entirely explain the overall stance of this government. It had a significant and increasing margin of bureaucratic autonomy and could perhaps have done more to mitigate racial segregation rather than make it into ‘a national standard’ (King and Lieberman 2009c). In the meantime the eleven states of the old Confederacy had become pockets of one-party dominant authoritarian rule that had secured a considerable and significant degree of autonomy from a federal State that yet aided and abetted them in curtailing the franchise and harassing and suppressing opponents. The hegemonic Democratic Party staffed, supervised and exploited local, county and state governments, while depending on its influence in Congress and in the national party to protect and maintain its freedom of political manoeuvre (Mickey 2015, 5). With policymaking in the hands of oppressive local majorities, the federal

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government was severely constrained in its capacity to impose national priorities and policies on these regimes. In these respects, the Southern states present a perfect example of ‘brown areas’, sub-national authoritarian regimes within a national democratic regime, where the national legal writ does not run, and citizenship rights are only imperfectly applied (O’Donnell 1999b). In America, the key to the reproduction of these regimes was the representation they managed to secure at federal level, especially in the Senate for its influence over the appointment of officials in priority departments and judges with jurisdiction within their boundaries. Although conditions on the ground varied widely depending on the disposition of local rulers and their clients, and on the character and degree of support for the local Democratic Party, this system of rule remained entrenched and mainly intact throughout the Progressive era, the years of the New Deal and the World War, and even into the 1950s and early 1960s—including Jim Crow, urban residential segregation and sporadic racial violence. This long legacy is a powerful testament to the resilience and endurance of the mode of oligarchic rule that accompanied the formation of the federal patrimonial State of the long nineteenth century. Only in the 1960s with the challenge to states’ rights that came with the Civil Rights Act of 1964 and the Voting Rights Act of 1965 did the federal government move in concerted fashion to destroy the racial foundations of the republic; while the federal courts and the Supreme Court that had been resistant and recalcitrant since the 1880s finally came on side (Gerstle 2009). Some elements of the old system persist to this day, notably the continuing denial of voting rights to ex-felons in some Southern states (see Chapter 7) and the anachronism that is the Electoral College. In the years following the watershed of the 1960s a phalanx of Republican Party conservatives sought to restore states’ rights through a ‘new federalism’—a central ambition of Chief Supreme Court Justice William Rehnquist from 1986 to 2005—but their very minor successes in this regard were extremely modest compared to the major reassertion of states’ rights in the 1880s and 1890s. Thus, the core configuration of the first mode of oligarchic rule to emerge in the United States was created by the narrowly oligarchic and strongly federal nature of the Constitution, especially the extensive scope accorded to states’ rights and powers in the initial absence of the federal administrative State. But this mode was subsequently shaped by important developments for which no provision was made in the Constitution, principally the growth of political parties and party patronage as the key

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to oligarchic manipulation of politics and policymaking in the localities. These developments led to a sui generis pattern of patrimonial party-State formation that underpinned a successful combination of a constricted but competitive representative politics with the ruthless exclusion of poor whites, women and racial minorities. Despite the Civil War and Reconstruction this mode of rule recuperated and maintained its core feature of private and oligarchic influence over public affairs, and succeeded in reinforcing exclusion through the disenfranchisement of the black population and the imposition of the Jim Crow system of racial segregation. This required the collusion of the federal courts, not least the Supreme Court, as well as the complicity of a Congress still mainly preoccupied with local and regional issues at a time when local parties were only loosely allied with national party organizations. Although this mode of rule had begun to change even prior to the turn of the century, the exclusionary character of oligarchic rule would remain constant, while the manifold incursions of oligarchic interests into the public sphere would continue to ensure its reproduction.

Notes 1. George Washington ran his 8000 acres spread across five farms in Mount Vernon with three hundred slaves, half of whom he owned. Slaves were subject to harsh punishments, and there were frequent sales to buyers from the West Indies that paid no respect to ties of family and friendship. Thomas Jefferson owned one hundred and thirty slaves who worked on his four farms totalling 5000 acres. He agonized over their harsh treatment, but his frequent absences left his overseers free to run the farms as they saw fit. Jefferson’s concubine-slave Sally Hemings bore his children, even as he continued his rhetorical assault on the ‘unremitting despotism’ and ‘moral depravity’ of slavery, while reserving a special opprobrium for racial mixing (Carwardine 2018, 2–3). 2. The 10th Amendment of the Constitution creates the strong presumption that residual powers do not pass to the federal State but rather to the individual states: ‘The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people’. 3. The share of agriculture in output decreased steadily, and the value of farmland also declined, as it did in Europe. But the United States accumulated a considerable stock of real estate and industrial capital, so that national capital was close to five years of national income in 1910, versus three in

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1810. The United States had closed the capital/income gap with Europe by one half in one century. 4. The malapportionment also leads inexorably to the glaring underrepresentation of racial and ethnic minorities which are concentrated disproportionately in a few of the largest states (Hacker and Pierson 2010, 236). 5. Most long-standing democracies in the advanced capitalist countries of the world have just one veto player because they are unicameral (or if bicameral, the upper house does not have a veto) and parliamentary: the only veto player is the prime minister’s majority in the lower house. A minority of such countries have two veto players and Switzerland and Australia have three (Stepan and Linz 2011, 844). 6. This does not describe all or even most of the republican tradition in America which has been mainly concerned with the form of liberty that is a consequence of self-government, a liberty only available to those who are members of a political community that controls its own fate and as a participants in the decisions that govern its affairs (Sandel 1996, 26). Government as self-government is equally concerned with the moral character of its citizens and the ends they pursue, and so must undertake to form their character and ends in order to foster the common good on which liberty depends (Sandel 1996, 127). Citizens are therefore made not found, and once the ‘incorrigibility thesis’ gives way, so does the nineteenth-century tendency of republican politics to sanction exclusion. In advancing this perspective on community, self-government, and the defence of the common good, the republican tradition clearly takes a moral view of societal arrangements that focussed, over most of the long nineteenth century and beyond, on the economic arrangements that might best encourage self-government. It is therefore a tradition that has, by turns, provided a counterweight to the overweening power of oligarchy.

References Achen, Christopher H., and Larry M. Bartels. 2016. Democracy for Realists: Why elections do not produce responsive government. Princeton: Princeton University Press. Beeman, Richard R. 2006. The Varieties of Political Experience in EighteenthCentury America. Philadelphia: University of Pennsylvania Press. Carwardine, Richard. 2018. The Foundations of American Democracy. Speech delivered at Washington and Jefferson College, 14th February. Cohen, Lizabeth. 2009. A Historian’s Reflection on the Unsustainable American State. In The Unsustainable American State, ed. Lawrence Jacobs and Desmond King. Oxford: Oxford University Press.

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Dahl, Robert. 1956. A Preface to Democratic Theory Chicago and London: University of Chicago Press. Dahl, Robert. 1961. Who Governs? Democracy and Power in an American City. New Haven and London: Yale University Press. Eisenstadt, Shmuel N. 2002. ‘The First Multiple Modernities: Collective Identities, Public Spheres, and Political Order in the Americas’. In Globality and Modern Modernities: Comparative North American and Latin American Perspectives, ed. Luis Roniger and Carlos H. Waisman. Brighton: Sussex Academic Press. Gerstle, Gary. 2009. ‘The Resilient Power of the States Across the Long Nineteenth Century’. In The Unsustainable American State, ed. Lawrence Jacobs and Desmond King. Oxford: Oxford University Press. González, Francisco E., and Desmond King. 2004. The State and Democratization: The United States in Comparative Perspective. British Journal of Political Science 34: 193–210. Hacker, Jacob S., and Paul Pierson. 2010. Winner-Takes-All Politics. New York: Simon and Schuster. Hartog, Hendrik. 1987. The Constitution of Aspiration and the Rights that Belong to Us All. Journal of American History 74: 1013–1034. Huntington, Samuel P. 1991. The Third Wave: Democratization in the Late Twentieth Century Norman: University of Oklahoma Press. Katznelson, Ira. 2005. When Affirmative Action was White: An Untold History of Racial Inequality in 20th Century America. New York: Norton. King, Desmond and Robert C. Lieberman. 2009a. ‘Ironies of State-building: A Comparative Perspective on the American State’ World Politics 61, 3, July, 547–88 (Review article). King, Desmond and Robert C. Lieberman. 2009b. ‘American State Building: The Theoretical Challenge’. In The Unsustainable American State, ed. Jacobs and King. Oxford: Oxford University Press. King, Desmond and Robert C. Lieberman. 2009c. ‘American Political Development as a Process of Democratization’. In Democratization in America, ed. Desmond King et al. Baltimore: Johns Hopkins University Press. Levitsky, Steven, and Daniel Ziblatt. 2018. How Democracies Die. New York: Crown Publishers. Mickey, Robert. 2015. Paths out of Dixie: The Democratization of Authoritarian Enclaves in America’s Deep South 1944-1972. Princeton: Princeton University Press. Morone, James A. 1998. The Democratic Wish: Popular Participation and the Limits of American Government. New Haven: Yale University Press. O’Donnell, Guillermo. 1999b. ‘Polyarchies and the (Un)rule of Law in Latin America’. In The (Un)Rule of Law and the Underprivileged in Latin America,

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ed. Juan E. Méndez, Guillermo O’Donnell, and Paulo Sérgio Pinheiro, 303– 337. Notre Dame: University of Notre Dame Press. Onuf, Peter S. 2000. Jefferson’s Empire: The Language of American Nationhood, 4–7. Charlottesville: University of Virginia Press. Piketty, Thomas. 2014. Capital in the 21st Century. Cambridge, MA: Harvard University Press. Ritter, Gretchen. 2009. ‘Gender and Democracy in the American Constitutional Order’. In Democratization in America, ed. King et al. Baltimore: Johns Hopkins University Press. Sandel, Michael, J. 1996. Democracy’s Discontent: America in Search of a Public Philosophy. Cambridge, MA: Harvard University Press. Skowronek, Stephen. 1982. Building a New American State: The Expansion of National Administrative Capacities, 1877–1920. New York: Cambridge University Press. Steinmo, Sven. 2010. The Evolution of Modern States: Sweden, Japan, and the United States. New York: Cambridge University Press. Stepan, Alfred and Juan J Linz. 2011. ‘Comparative Perspectives on Inequality and the Quality of Democracy in the United States’. Perspectives on Politics 9: 4, December, 841–856 (Review Essay). Stimson, James A. 2004. Tides of Consent: How Public Opinion Shapes American Politics. New York: Cambridge University Press. Taylor, Steven L., Matthew S. Shugart, Arend Lijphart, and Bernard Grofman. 2014. A Different Democracy: American Government in a 31-Country Perspective. New Haven: Yale University Press. Tocqueville, Alexis de. 1946. Democracy in America ed. Henry Steele Commager. London: Oxford University Press. Tuck, Stephen. 2009. ‘The Reversal of Black Voting Rights after Reconstruction’. In Democratization in America, ed. King et al. Baltimore: Johns Hopkins University Press. Whitehead, Laurence, Desmond King, and Gretchen Ritter. 2009. ‘American Political Development and Comparative Democratization’. In Democratization in America, ed. King et al. Baltimore: Johns Hopkins University Press. Winters, Jeffrey A., and Benjamin I. Page. 2009. Oligarchy in the United States? Perspectives on Politics 7 (4): 731–751. Zakaria, Fareed. 1997. The Rise of Illiberal Democracy. Foreign Affairs 4: 22–43.

CHAPTER 5

Second Mode—Oligarchic Alliance and Party Politics

Abstract The principal markers of the long transition to the second mode of oligarchic rule were a huge accumulation of concentrated corporate power and a corresponding increase in federal State intervention. The higher profile of the federal State was confirmed by the New Deal, but the haphazard expansion of a poorly coordinated State administration tended to replicate and reinforce the pattern of oligarchic incursion into the public sphere at the federal level, while federal policy was diluted by oligarchic control of the localities, especially in the South. Democratic Party control of the South prepared the ground for a national oligarchic alliance that was secured by party cooperation and deal-making in the Congress, so extending party-State patrimonialism. This mode of rule began to disintegrate in the 1960s when the late democratization of the United States broke the oligarchic alliance that underpinned it. Keywords Private · Public · Congress · Racism · Exclusion

The South and the Oligarchic Alliance The deep contradictions between the founding principles of the republic and the exclusionary practices of its politics were emphatically not resolved by the Civil War which was eventually seen to be more about © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 J. Foweraker, Oligarchy in the Americas, https://doi.org/10.1007/978-3-030-63146-8_5

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the political integrity of the Union than the emancipation of black Americans (González and King 2003). What emerged from the conflict is still open to debate. On one view it was a dual system of a Jacksonian democracy in the North and West and an exclusionary authoritarian regime in the South. On another the country had ‘divided…into an industrial Republican core and an agrarian Democratic periphery’ by the time of the Progressive era (Johnson 2009). Against these views others argue that there was just one political system that was divided North and South by racial segregation and subject to ‘permanent tensions and contradictions, historically resolved by casting and recasting the American State’ (González and King 2004, 206). In my view there was indeed only one political system. But the tensions and contradictions within it expressed the contest between oligarchic rule and the recurrent attempts to reform it; and the contradictions were only ever partially resolved by the changing shape of the patrimonial State, the primary site of the protection and projection of oligarchic power and privileges. It was this adaptive process that marked the politics of the Progressive era, ‘a transitional stage between the federalism of the 19th century State and the centralization of the New Deal State’ (Cohen 2009). At this time the federal government, and Congress above all, continued to lack administrative capacity and coherence. Congress had ‘few permanent staff, no budgeting ability, and no clearly articulated interest in expanding the American State’ (Johnson 2009, 100). On the contrary, it tended to represent local and specific interests first and national policy last, and the committee system faithfully reflected these priorities. In the face of inter- and intraparty division, legislative output required enabling coalitions that allowed wide variation in implementation across the states of the Union, providing near perfect political conditions for the states of the old Confederate South, as well as border states such as Kentucky and Missouri, to perpetuate the relatively autonomy of what was a white supremacist and authoritarian enclave.1 The Progressive era was the first era of big money. The railroad boom of the late nineteenth century had created a new breed of commercial barons who, alongside their industrial and financial allies, rapidly accumulated a vast reserve of economic power that they deployed to despoil the environment, suppress workers’ organizations, head off consumer protections, and, most critically, suborn any politician who might stand in their way (Hacker and Pierson 2010, 79). Indeed, buying political support was just an extension of normal business practice, and this was most manifest

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in the ‘Millionaires’ Club’ that was the US Senate (Johnson and Kwak 2011, 16), whose members at that time were still appointed by state governments.2 At the heart of the entry of new money into the politics of the era, whether legal or illegal, were the banks; and a mere handful of bankers led by J. P. Morgan played a key role in this rapid transformation of the business world, controlling as much as forty per cent of total capital investment in industry at the turn of the century (Johnson and Kwak 2011, 16). In a lightly regulated banking system industrial concentration led to an extraordinary measure of financial concentration. This led Louis Brandeis, a prominent lawyer and future Supreme Court Justice, to speak out against the banks. Like Jefferson and Jackson in the early years of the republic he highlighted the perils of handing too much private power to the banks, so opening the way to the financial control of major business corporations. But his 1913 article on ‘Our Financial Oligarchy’, and many others that followed, went unheeded, and within a few brief years the rampant financial speculation of the 1920s had precipitated the crash of 1929 that ushered in the Great Depression (Johnson and Kwak 2011, 19).3 In response to big money, the reform movements of the Progressive era did push the federal government towards greater centralization and an expanded role for the State in public affairs, with the primary purpose of breaking up emerging monopolies and oligopolies; and this was later followed by the New Deal policies designed specifically to prohibit collusion between finance and industry (Steinmo 2010, 160–161). In this regard, the various Progressive efforts to empower the people (through initiatives, recalls, referenda, extensions of the suffrage4 and constraints on judicial review) were intended to mobilize against the ‘new aristocrats of plunder and privilege’ (Morone 1998, Chapter 3). In the belief that policies pursued in the name of free commerce worked to create markets that favoured only big money, and openly fearful that democracy would give way to oligarchy (Hacker and Pierson 2010, 82), the Progressives tended to couch their battles in the grandiloquent language of democracy. But the ambivalent result was a complex mix of interventions that frequently created, protected or fostered private interests and powers, so subverting their reformist thrust.5 The legacy of their efforts was a large but unwieldy institutional apparatus that at best contained the rudiments of a modern administrative State. But it is mistaken to claim that this institutional legacy effectively destroyed the Jacksonian party-State. To the contrary, the Progressive reformers were ‘repeatedly stymied’ by ‘an

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assemblage of weak legislative institutions dominated by a multitude of powerful interests and characterized by limited administrative capacity’ (King and Lieberman 2009a, 562), and Congress never shared the same national State-building goals of the reformers but remained imbricated with local political issues and concerns. Hence, the core aspiration of Herbert Croly’s classic statement of Progressive politics, The Promise of American Life, that state governments would be valued but only as parts of an ‘essentially national system’ (Johnson 2009) was never fulfilled. In sum, the dividing line between public power and private interests remained as blurred as it was in the party-State of the nineteenth century. The literature on American political development recognizes this, and so rejects any decisive transition from the private power of the federated State of the nineteenth century to the public coercive power of the twentieth. But it tends to interpret this in terms of the role of private activity in constituting public power (Lieberman 2009, 213) not only in legislatures and executives but also in bureaucracies and the courts. This is accepted once it is understood—and this is the essential point—that the ‘constitution’ of public power in this way routinely serves oligarchic interests through the continuing process of patrimonial State formation. The Progressive movements drew directly on the American tradition of republican thought in its insistence that to be free is to share in governing a political community that controls its own fate. The threat to self-government came both from the concentration of economic and political power amassed by big corporations and financial capital and from the erosion of traditional forms of authority and community that had characterized the first century of the republic. Together these minatory tendencies could strangle the life out of the public realm where citizens were accustomed to debate their common destiny. Progressive politics found its natural home in a perceived progressive tradition that advanced through universal male suffrage in the Jacksonian era, Emancipation, the 14th and 15th Amendments, women’s suffrage and the legitimation of organized labour in the 1930s (Morone 1998, 20). But if the ‘power of high finance’ became ‘greater than the power of government’ (Woodrow Wilson, quoted by Sandel 1996, 221),6 the narrative of the American egalitarian spirit would be lost for ever; and it was in that spirit, mythical as it was in large degree, that the Progressive administrations of the 1910s pioneered a very progressive estate tax on large fortunes as well as a progressive income tax on excessive incomes. Despite these reformist initiatives income inequality increased quite sharply during the 1920s,

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peaking on the eve of the 1929 crash with more than fifty per cent of national income going to the top decile. This was a higher level of income inequality than in Europe at that time owing to the levelling effects of World War I and its aftermath, but the combination of the Great Depression and World War II led to a substantial reduction in American income differentials by the 1950s (Piketty 2014, 293). Full employment and rising real incomes for those in the bottom deciles created the conditions for the American Dream. But any comfort to be drawn from these contingent results did not survive the subsequent decades, with the inequality of income and wealth in America today greater than at any time in its history, and noticeably more extreme than in any other leading capitalist economy. Throughout the Progressive era the main challenge posed within the republican tradition was how to protect representative government from the control of large industrial and financial corporations: the anti-trust movement was driven by a deep unease at the prospect of unbridled oligarchic power. The question arising from that same challenge throughout the years of the New Deal was ‘whether to form a rival concentration of power in the national government, or to decentralize economic power in hopes of making it accountable to local political units’ (Sandel 1996, 251). In practice, the answer to that question was inscribed in the rules and procedures of Congress that tended to decentralize authority for specific policy areas to separate committees, so splitting national policy into different functional domains managed by specific groups of representatives. Perhaps unwittingly, the committee system delegated authority for regulatory policies to the very interests that were to be regulated. This mattered everywhere, but it mattered rather more in the South, where the political structure remained much as it had been post-Reconstruction—‘oligarchic, reactionary, and myopic’ (Key 1949)—with its one-party dominant electoral politics undisturbed since the 1870s. The federal government lacked bureaucratic capacity and regulatory experience and so typically had to work with local oligarchies to implement its policies. Local power brokers then bent these policies to serve oligarchic interests and reinforce the traditional power structure. It is often remarked how the first one hundred days of Roosevelt’s first administration changed the face of American government. But this initial political success and the electoral victories that followed in 1936 and 1940 also served to ensconce Southern Democrats in key committees of Congress, the seniority rule ensuring these racist Dixiecrats the

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power to protect their oligarchic clients from the New Deal reforms (Steinmo 2010, 174). Thus, somewhat less remarked is the leeway the federal government left to the South in its reform programmes: racial discrimination in relief initiatives, racial wage differentials, the refusal to back antilynching legislation, the discouragement of union organization and much more (Brinkley 1998, Chapter 4). For the federal government there was simply no way to win sufficient support in Congress without the Dixiecrats on side, and so it left the South well alone. It is apparent that the relative stability of the American political system over the many decades since the end of Reconstruction rested squarely on racial exclusion. If the original sin of the American founding was the failure to address the slavery question, its offspring was the Compromise of 1877 that permitted disenfranchisement and the consolidation of Jim Crow. As a direct result the South emerged as a powerful reactionary force within the Democratic Party, simultaneously vetoing civil rights and acting as a bridge to the Republican Party, with the Dixiecrats’ political proximity to conservative Republicans reducing polarization and promoting bipartisanship. Racial exclusion was the condition for the partisan civility and cooperation that came to characterize twentieth-century American politics (Levitsky and Ziblatt 2018, 141). As Schattsneider famously observed, ‘parties are not…merely appendages of modern government; they are in the centre of it and play a determinative and creative role in it’ (Schattsneider 2017, 1). In this instance the parties worked in combination to deliver and reproduce the grand oligarchic alliance that sustained political stability and effective government; and, at this time in American history, it was therefore the party system and the work of Congress that took the lead in protecting and projecting oligarchic interests. This certainly did not preclude the capture of administrative institutions by oligarchic interests, where the ‘deference of government to private groups’ often means that ‘power is displaced from the public to the private realm’ (McConnell 1966, 5–6). To the contrary, different degrees of State ‘capture’—where administrative processes and regulatory outcomes were agreed between public agencies and private interests—were facilitated by the capacity of the parties in Congress to craft winning coalitions. The parties were crucial to the combination and interaction of the formal and informal rules that characterize the patrimonial State. In the aftermath of World War II, the demands on federal government multiplied as the Great Depression gave way to the prosperity of

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the American Dream. There were calls for a comprehensive social welfare system and more coherent tax policies like those being developed in Europe. But the influence of the South in Congress continued undiminished or even enhanced by Dixiecrat occupancy of key committee chairs. Reform initiatives were therefore still subject to special interests and lobbying, with the Dixiecrat blocking coalition always able to decide the issue. Intense political trading left ‘most reforms sprawling helplessly in a scrum of competing interests’ (Marris and Rein 1974), and the result was the piecemeal expansion of individual programmes and tax relief for specific constituencies that could gain the ear of a powerful committee chair. At a critical juncture, the representatives of the South in Congress certainly acted to disqualify the kind of comprehensive and universal social policies that are quite usual in other advanced economies. But the longerterm legacy was a highly fragmented and incoherent State administration where every city, every statehouse and every office of federal government always offered a political purchase somewhere for special interests to seek succour and support. There are heartfelt laments that the American State fails to embody a sense of community, that Americans have failed to institutionalize a communal spirit—an active notion of the people—within their government (Morone 1998, 29). Insofar as this is true, it is in part a reflection of the lack of universal social policies. But, more broadly, it reflects the deeper truth that the American State is a patrimonial State that serves the oligarchy first, the people second. This is the State that endures even as the mode of oligarchic rule associated with Southern autonomy and racial exclusion began to decline and eventually collapse in the 1960s and beyond.

State Intervention and the Collapse of the Alliance The oligarchic alliance sustained but also limited federal State authority in America from the 1880s to the 1960s. The Federal State expanded exponentially, especially in the New Deal years, and became more centralized, but government intervention routinely resorted to indirect and often hidden mechanisms to manipulate the private sector. The State did come to play a leading role in regulating markets and overcoming market failures (Hacker and Pierson 2016) but the course of government intervention has been less coordinated and more haphazard than that of other advanced capitalist economies (Steinmo 2010, 25). In this regard the

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governments of the New Deal were ambitious of necessity: Roosevelt’s Banking Act of 1933 was a concerted attempt to rein in the power of the financial oligarchy; and his 1935 message to Congress called for increased inheritance and gift taxes, higher income taxes on the wealthy, and a graduated corporate income tax that would rise with the size of the business. But this ambition for direct intervention did not survive the resistance from big business and so the indirect mechanisms of Keynesian fiscal policy came to direct the government’s response to the crisis of the Great Depression (Sandel 1996, 255).7 Liberal commentators later tended to celebrate this response for defining a relatively modest role for the State that did not bring it too far into the economy. But the accumulation of New Deal policies had set a benchmark for an expanded presence of the State in the mixed economy, and subsequent years saw the emergence of a State with ‘far greater spending capacity, regulatory reach, responsibility for a range of social rights, and ability to structure incentives through the tax code’ (Pierson and Skocpol 2007, 31). Rather than clarifying the division between the public sphere and private interests, the expansion of the federal State served to multiply the bureaucratic opportunities to blur the line between them. The literature sees this as an unusual and specifically American form of State-building with State strength and capacity emerging ‘out of links with society rather than autonomy from it’ (King and Lieberman 2009a, 581). In this view, intervention and regulation by a constrained public authority can be bolstered by alliances with private actors while still serving a public purpose. In numerous ways that the authors might not recognize, this is a view that chimes with a pluralist and nonideological account of American democratic politics that corresponds completely to the period of partisan civility that accompanied the zenith of the oligarchic alliance. This is a politics of compromise, adjustment and bargaining, managed by professional or quasi-professional politicians (Dahl 1967, 21–22), and remote from the lives of ordinary citizens (Mair 2013). It also invokes the notion of the Establishment,8 that socially cohesive cabal from top universities and law schools (Yale, Harvard Law School) who worked the inside track between Wall Street (law firm or investment bank), elite counsels (Century Association, Council on Foreign Relations) and federal government: a powerful network of institutions within the interlocking worlds of business, finance, philanthropy and government (Brinkley, Chapter 10). And what unites the pluralist politics and the Establishment is the easy mingling of public and private power. These do reflect a very American

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process of State formation that has been shaped from its beginnings to suit oligarchic interests, a party-centred patrimonial State whose very lack of cohesion serves to promote the interaction of formal and informal rules that characterizes it. Throughout this process, there has been push-back from democratic movements and struggles that have had recurrent but reversible success in curbing State power in the public interest, even at a time of considerable State expansion (King and Lieberman 2009a, 568). But these downstream effects are a reaction to upstream initiatives to reproduce the conditions for oligarchic rule in a new era of federal State intervention. The oligarchic alliance was conditional on racial exclusion and it was the successful struggle against this exclusion that eventually broke it. Success depended on mobilization to challenge the oligarchic regimes of the Southern states and federal State intervention to enforce democratic rights (Lieberman 2009). Success came slowly. The Southern partystate regimes were deeply entrenched and the Dixiecrats still controlled the most important Congressional committees. But the regimes eventually succumbed to the attrition of successive external interventions that degraded their political resources and strengthened their opponents. These included the Supreme Court’s abolition of the white primary in 1944; national Democrats’ embrace of racial equality in 1948; the Supreme Court’s invalidation of state-mandated segregation in schools and other public sites in 1954 and the important college desegregation crises that the decision spawned; the Court’s invalidation of gross legislative malapportionment in 1962; the Civil and Voting Rights Acts of 1964 and 1965; and the national party reforms of 1968–72 (Mickey 2015, 23).9 In response to the emerging role of the federal State as an ‘agent of democratization’ (King and Lieberman 2009b, 304) black insurgents, mostly in the South, pressed for change and capitalized on federal legislation and federal judicial rulings. By the 1960s it was black empowerment through the civil rights movement that became the primary impulse for change, while the federal State worked to dismantle the apparatuses of disenfranchisement, segregation and repression of the Southern regimes. The course and pace of change varied across the Southern states, depending above all on differences in oligarchic cohesion and party-state institutions,10 but together they comprised a process of radical regime change (Mickey 2015) that appeared to make Martin Luther King’s dream at last compatible with the American Dream. By any objective measure American society had never been more inclusive and never more

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equal11 since the founding, but regime change in the South would put its stable pattern of oligarchic collusion in check and polarize its politics. Prior to regime change in the South both Democrats and Republicans had been broad churches encompassing diverse constituencies and a wide range of political views, and this internal heterogeneity prevented polarization. In Congress they might differ on such issues as taxing and spending and economic regulation but they overlapped on the core question of race: though both parties contained elements that supported civil rights, a conservative coalition of Dixiecrats and right-wing Republicans opposed them, while committee control by the Dixiecrats worked to side-line the issue (Levitsky and Ziblatt 2018, 167). This was the partyState expression of the oligarchic alliance. But black empowerment and the termination of racial exclusion impelled a process of partisan realignment that transformed the face of American politics. For the first time in almost a century partisanship and ideology converged, with the Republican Party becoming broadly conservative and the Democrats mainly liberal, and voters followed these ideological cues. The solidly Democratic South shifted over the coming years to the Republican Party, excepting the Southern blacks who voted almost exclusively Democrat. And as the South went Republican, the Northeast went Democrat on the votes of many liberal Republicans. Black enfranchisement and waves of immigrants who vote disproportionately Democrat have raised the non-white share of the Democratic vote from seven per cent in the 1950s to forty-four per cent or more today, while Republican voters are nearly ninety per cent white.12 The result of the realignment is that ‘the two parties are now divided over race and religion – two deeply polarizing issues that tend to generate greater intolerance and hostility than traditional policy issues such as taxes and government spending’ (Levitsky and Ziblatt 2018, 171). On one account it was an increasingly conservative Republican Party that set out to split the so-called New Deal coalition, with the white backlash coming to define its electoral politics. Republicans pioneered the politics of resentment, turning America into Nixonland (Perlstein 2008) by realigning the South and road-testing the polarizing politics that poisoned political debate (Hacker and Pierson 2010, 94). And—all too predictably perhaps—this project was rooted in the South, it only being a matter of time before the nation’s ‘most conservative region aligned with the nation’s more conservative political party’ (Hacker and Pierson 2016, 190). In 1974, two-thirds of Southern members of the House of Representatives were Democrats, but by 1994 two-thirds were Republicans.

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Moreover, the party’s most powerful figures were themselves Southern13 and the party itself—unlike the party of Reagan—a profoundly Southern party. Their voters in the South, especially in primaries, are more conservative than those elsewhere, especially the evangelicals who came to swell their ranks, and their activists more conservative still (Hacker and Pierson 2016, 200–201). In this view, it was therefore the South that drove the party to become ideologically extreme and uncompromising, deeply sceptical of traditional social and economic policies, and dismissive of the legitimacy of the political opposition (Mann and Ornstein 2012). It is a commonplace that the Republican Party took this radical right-turn at the watershed elections of 1968 and 1972, when Nixon talked up matters of race and crime to pioneer a new populist politics of anger and resentment directed against ‘Washington liberals’ (Hacker and Pierson 2010, 94). But those elections sit squarely within the period of government activism and intervention in the market that runs, roughly from 1964 to 1977, and the Nixon administration just kept on doing what government was used to doing by way of spending, taxation and regulation; so compared to leaders of his party today, or even to many Democrats, Nixon looks like a fully fledged social democrat (Hacker and Pierson 2016, 96). It was a few years later, with a Democrat president and full Democratic control of Congress, that the real right-turn in economic policymaking took place as government began to retreat from its responsibility for market regulation. Big business gained the upper hand in Washington, and intensive lobbying ensured the failure of the labour law reform bill of 1978 and the collapse of private sector unions; while market incentives were allowed free play, with no attempt to regulate corporate executive pay and rewards. All the signs pointed in the direction of the ‘Reagan revolution’ to come. By now there can be no doubt about the enduring influence of the South on the history of American oligarchic rule. But one important element of the story of the South is still missing, and that is its long history of anti-establishment and populist movements. The early period of these movements culminated in the career of Huey Long in Louisiana, who campaigned over many years against the concentrated economic and political power of the few to govern the lives of the many, and, by extension, against the big banks, against corporate tyranny and also against the powerful incursions of the federal administration (Brinkley 1998, 73). Long is sometimes seen as a traditional Southern demagogue, but the revisionist view is of a progressive populist politician who promised and often delivered real solutions to real needs and grievances, and recurrently

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locked horns with the archaic oligarchic regime of his state in doing so. In this his career took a very different path to that of the other leading populist from the South, George C. Wallace, the four-term governor of Alabama, though their political postures were remarkably similar in most respects. Wallace also protested against concentrated wealth and economic power, and though in favour of tax reform, increases in Social Security, unemployment compensation and a minimum wage, he too inveighed against the growing power of a federal government dominated by a liberal elite that was remote from the lives of ordinary Americans and scornful of their values (Sandel 1996, 297–299). But the big difference between the two is that Wallace was a politician who bestrode the national stage, running four times for the presidency, three times as a Democrat and once as the American Independent Party candidate. On each occasion Wallace lost the race but garnered an impressive amount of popular support in doing so. As a third-party candidate in 1968 Wallace drew close to ten million votes and carried five states with forty-six Electoral College votes; and before being shot and badly injured on the primary campaign trail in 1972 he had won more of the popular vote than any other Democrat candidate, winning five primaries and finishing the runner-up in five others. What is most remarkable in retrospect, however, is that he did so as a declared segregationist with an overtly combative stance, who campaigned with just the one stump speech shot full of taunts, insults and threats against sissy Washington bureaucrats and bearded professors and long-haired hippies. In stance, attitude, style and rhetoric he was the complete precursor to President Trump. These populists anchored their electoral platforms in their opposition to concentrated economic power and the increasing intervention of federal government, the two principal markers of the transition to the second mode of oligarchic rule. The emergence of big corporations and conglomerates in close cooperation with a powerful financial oligarchy spurred the Progressive movement to demand federal State intervention in the form of progressive taxation and anti-trust legislation, promoting a higher federal State profile that was confirmed by the State management of the economy under the New Deal. But the key political element of the shift to the new mode of rule began with the Compromise of 1877 which secured the South for the Dixiecrats and so prepared the ground for the national oligarchic alliance that constituted the mainstay of oligarchic rule until the 1960s. This alliance underwrote the changing character of the patrimonial party-State that was marked increasingly by the combination

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of formal and informal rules in both the making and implementation of federal government policy. This gradual dissolution of the divide between private interests and the public sphere at the federal level was facilitated by the fragmented and incoherent expansion of the administrative State and by the particularistic rather than universal provision of public services and goods. Above all, it was the pattern of party cooperation and deal-making in the Congress that brokered the compromises that sustained an alliance built on racial exclusion in the South. Thus, the political zenith of the alliance coincided with the apogee of party-State patrimonialism in the Congress. The Compromise itself had been a notoriously informal deal— its exact contents unknown to this day—and its legacy was a pervasive informality in the conduct of the federal government that was critical to the reproduction of oligarchic rule. Oligarchic influence was as variegated and variable as the State apparatus itself, but it was the imbrication of federal State intervention and oligarchic rule at local state level, especially in the South, that proved so provocative to their populist politicians.

Notes 1. These coalitions were often the outcome of intergovernmental policy initiatives that created state-level regulatory networks. These initiatives were characterized as a ‘dual system’, often a euphemism for statutory segregation. Sixteen state universities for blacks were set up under this system, but they received barely any funding, sending the message that the ‘new federalism’ was effectively for and by whites only (Johnson 2009, 108). This was harshly confirmed by the Good Roads policy in the South, where thousands of black Americans were pressganged into reluctant road crews in conditions that resembled those of slavery (Ward 2005). 2. Johnson and Kwak refer to Senators Mark Hanna and Nelson Aldrich, both important business allies and power brokers in the Republican Party, which controlled the White House for all but eight years from 1869 to 1913 and held a Senate majority for all but two years from 1883 to 1913. Hanna ran the Republican Party machine from the time of William Mckinley’s successful presidential campaign of 1896 into the Theodore Roosevelt years and Aldrich virtually dictated the Party’s positions in the Senate on the regulation of banking and industry (Johnson and Kwak 2011, 16). 3. For future reference it is worth noting that the crash was initially followed by generous bailouts for New York financial firms and then by a series of bungled attempts to save the rest of the financial system. The Federal

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4.

5.

6.

7.

8.

9.

10.

11.

Reserve’s safety net created moral hazard, and the excessive financial risktaking that ensued brought on the Depression. The 19th Amendment granted women the right to vote in 1920 but had little impact on women’s civic status. It has been characterized as ‘one of the great non-events in American political history’ (Ritter 2009, 114). The Pendleton Civil Service Reform Act of 1883 had sought to constrain political patronage within public administration by introducing a meritbased system of appointments, if only for a small minority of employees, and set up the US Civil Service Commission to supervise it. But appointments by political patronage were simply one expression of the informality that characterized the patrimonial State and the entrenched oligarchic interests it served, so the so-called spoils system remained largely impervious to this and subsequent reform initiatives. Sandel sees the significance of the 1912 presidential campaign in the assumptions that were shared among the contenders. Both Wilson and Brandeis on the one side and Croly and Roosevelt on the other agreed, despite their differences, that economic and political institutions should be judged for their impact on the moral qualities that self-government requires, whether positive or negative (Sandel 1996, 221). But the New Deal governments did adopt some policies designed to reduce the influence of private capital, such as rent control, and also a modest measure of progressive taxation, so that after World War II real estate and stock prices stood at historical lows. Overall American private wealth decreased from nearly five years of national income in 1930 to less than three and a half in 1970 (Piketty 2014, 153). According to Brinkley, it was Henry Fairlie who introduced the idea of the Establishment to the UK in an article in the Spectator in 1955, but there was no mention of it in the United States before a satirical article by Richard Rovere in the American Scholar of 1961 (Brinkley, Chapter 10). But even when racial discrimination of all kinds had been firmly outlawed, it is noteworthy that the Supreme Court’s commitment to gender equality was ‘at best partial and incoherent’ (Ritter 2009, 129). Some point to differences in the extent of labour-repressive agriculture to explain the variation—pace Barrington Moore—and therefore focus on the decline of ‘King Cotton’ and the mechanization of agriculture. Others look primarily at urbanization and so favour black insurgency. But Robert Mickey devotes attention to the specific preferences and choices of oligarchic actors as determining the different degrees of resistance and conflict across states, and eventually, the different patterns of democratization that ensue (Mickey 2015). ‘Inequality reached its lowest ebb in the United States between 1950 and 1980: the top decile of the income hierarchy claimed 30 to 35 percent of US national income, or roughly the same level as in France today’

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(Piketty 2014, 294). The top decile had claimed 45–50 per cent in the 1910s–1920s and would do so again in the 2000s–2010s (Piketty 2014, 24). For all that, inequality in the 1950–1980 period still stood above inequality in Europe at the time because Europe had suffered the direct destruction of accumulated capital by the World Wars, what Piketty calls ‘the suicide of rentier society’ (Piketty 2014, 294). 12. The white working class, the traditional backbone of the Democratic Party, has shifted away from the Democrats and towards the Republicans, and this is true both within the South and outside it, and among both religious and nonreligious voters. Across the board white working-class voters are about twenty percentage points less likely to vote Democrat than a generation ago (Hacker and Pierson 2016, 233). Robert Kennedy was perhaps the last politician of the era to reach out successfully to both blacks and poor whites in responding to a growing public sense of unease and discontent. 13. Hacker and Pierson observe that the most powerful figures in the GOP in the years after 1994, such as Newt Gingrich, Tom DeLay, Mitch McConnell, Trent Lott and, notably, George W. Bush were almost exclusively southern, the principal exceptions being mid-westerner Bob Dole and recalcitrant westerner John McCain. The generational transition from George Bush Senior of Kennebunkport, Maine to George Bush Junior of Crawford, Texas can serve as a symbol of the GOP’s transformation into a Southern party (Hacker and Pierson 2016, 200).

References Brinkley, Alan. 1998. Liberalism and Its Discontents. Cambridge, MA: Harvard University Press. Cohen, Lizabeth. 2009. A Historian’s Reflection on the Unsustainable American State. In The Unsustainable American State, ed. Lawrence Jacobs and Desmond King. Oxford: Oxford University Press. Dahl, Robert. 1967. Pluralist Democracy in the United States: Conflict and Consent. Chicago: Rand McNally. González, Francisco E. and Desmond King. 2003. ‘The United States’. In Democratization through the Looking-Glass, ed. Peter Burnell. Manchester: Manchester University Press. González, Francisco E., and Desmond King. 2004. The State and Democratization: The United States in Comparative Perspective. British Journal of Political Science 34: 193–210. Hacker, Jacob S., and Paul Pierson. 2010. Winner-Takes-All Politics. New York: Simon and Schuster.

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Hacker, Jacob S., and Paul Pierson. 2016. American Amnesia. New York: Simon and Schuster. Johnson, Kimberley S. 2009. ‘The First New Federalism and the Development of the Modern American State: Patchwork, Reconstitution or Transition?’ In The Unsustainable American State, ed. Lawrence Jacobs and Desmond King. Oxford: Oxford University Press. Johnson, Simon, and James Kwak. 2011. 13 Bankers: The Wall Street Takeover and the Next Financial Crisis. New York: Pantheon Books. Key, Valdimer O. 1949. Southern Politics in State and Nation. New York: Alfred A. Knopf. King, Desmond and Robert C. Lieberman. 2009a. ‘Ironies of State-building: A Comparative Perspective on the American State’ World Politics 61, 3, July, 547–88 (Review article). King, Desmond and Robert C. Lieberman. 2009b. ‘American State Building: the Theoretical Challenge’. In The Unsustainable American State, ed. Jacobs and King. Oxford: Oxford University Press. Levitsky, Steven, and Daniel Ziblatt. 2018. How Democracies Die. New York: Crown Publishers. Lieberman, Robert C. 2009. ‘Civil Rights and the Democratization Trap: the Public-Private Nexus and the Building of American Democracy’. In Democratization in America, ed. Desmond King et. al. Baltimore: Johns Hopkins University Press. Mair, Peter. 2013. Ruling the Void: The Hollowing Out of Western Democracy. London: Verso. Mann, Thomas, and Norman Ornstein. 2012. It’s Even Worse Than It Looks: How the American Constitutional System Collided with the New Politics of Extremism. New York: Basic Books. Marris, Peter, and Martin Rein. 1974. Dilemmas of Social Reform: Poverty and Community Action in the United States. Harmondsworth: Penguin Books. McConnell, Grant. 1966. Private Power and American Democracy. New York: Alfred A. Knopf. Mickey, Robert. 2015. Paths out of Dixie: The Democratization of Authoritarian Enclaves in America’s Deep South 1944–1972. Princeton: Princeton University Press. Morone, James A. 1998. The Democratic Wish: Popular Participation and the Limits of American Government. New Haven: Yale University Press. Perlstein, Rick. 2008. Nixonland: The Rise of a President and the Fracturing of America. New York: Simon and Schuster. Pierson, Paul, and Theda Skocpol. 2007. The Transformation of American Politics: Activist Government and the Rise of Conservatism. Princeton: Princeton University Press.

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Piketty, Thomas. 2014. Capital in the 21st Century. Cambridge, MA: Harvard University Press. Ritter, Gretchen. 2009. ‘Gender and Democracy in the American Constitutional Order’. In Democratization in America, ed. King et al. Baltimore: Johns Hopkins University Press. Sandel, Michael, J. 1996. Democracy’s Discontent: America in Search of a Public Philosophy. Cambridge, MA: Harvard University Press. Schattsneider, Elmer E. 2017 [1942]. Party Government. London and New York: Routledge. Steinmo, Sven. 2010. The Evolution of Modern States: Sweden, Japan, and the United States. New York: Cambridge University Press. Ward, Deborah. 2005. The White Welfare State: the Racialization of U.S. Welfare Policy. Ann Arbor: University of Michigan Press.

CHAPTER 6

Third Mode—Oligarchy Transformed, the Republic Reduced

Abstract The political tumult of the 1960s and 1970s ushered in a period of rapid reorganization of oligarchic rule alongside multiple realignments in the party-political arena. With the federal government’s retreat from market regulation, the privatized provision of public goods and increasingly regressive taxation led to unprecedented extremes of economic and social inequality that combined with the financialization of the economy and the dynamism of the financial sector to construct a new mode of oligarchic rule. This chapter explains how high returns to capital and super-rents deriving from market power and monopolies created a new financial oligarchy and a step-change in the private command of public policy, leaving the oligarchy largely unaccountable to democratic government. In the financial crisis of 2008–2009, this oligarchy retained its profits while socializing its losses, and the exclusionary consequences effectively split the republic into ‘two nations’. Keywords Parties · Realignment · Finance · Regulation · Inequality

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The Changing Character of the Oligarchy The take-home message of President Reagan’s inaugural address was the ‘government is not the solution to our problem, government is the problem’ (Johnson and Kwak 2011, 36). Reducing government by retreating from market regulation would increase personal freedom as well as boosting the productivity of the private sector. In small part, this audacious gamble on the free market reflected a growing loss of trust in the Washington establishment and the political calculation that the winning strategy was to run against it, with both Carter and Reagan campaigning as political outsiders (Hacker and Pierson 2016, 196). In larger part, it reflected aggressive lobbying by corporate interests and a conservative insurgency that sought unashamedly to undo the legacies of the New Deal. More broadly yet it coincides with the advent of the ‘procedural republic’ and its consolidation in constitutional law, the result of an accumulation of Supreme Court rulings insisting on government neutrality between political ends: there is a compelling congruence between the ‘unencumbered self’ of the procedural republic—we are all free to pursue whatever ends we deem to be in our own best interest—and the untrammelled competition of the free market. In practice, the arrival of what has been called the ‘anti-state State’ (Cohen 2009) ushered in an era of deregulation, privatization, regressive taxation, deindustrialization, the loss of workers’ rights, and the roll-back of affirmative action. It also increased the fragmentation and incoherence of the state administration as previously stable policy areas were prized from their legal settings and made ‘discretionary’ (Skowronek 2009) and subject to extensive political conflict over State priorities. Yet the United States was not alone in adopting neoliberal policy prescriptions at this time, and it is argued that the breakdown of the Bretton Woods system of fixed exchange rates and the first major oil crisis of 1974 were early signs of a declining State capacity to control the economy, so that the State was simply recognizing the imperatives of globalization. But America was a driver of globalization, a rule-maker not rule-taker, though the idea of globalization could be and was used quite effectively as a justification for domestic policy choices that rapidly increased economic inequality by hugely favouring those at the very top while pushing many more of those at the bottom into poverty (Stiglitz 2015, 191). To be clear, it was government action that engineered a massive transfer of income and wealth from the lower and middle classes to the very rich.

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The distribution of income and wealth in the United States in the 1970s looked much like that of many other advanced economies. Today, by every standard indicator, it is the most unequal by a large margin (Stepan and Linz 2011, 841), and in this respect has ‘streaked ahead’ of Europe and Latin America (Formisano 2017, 2). The upper decile’s share of national income rose from thirty to thirty-five per cent in the 1970s to forty-five to fifty per cent in the 2000s and had exceeded fifty per cent by the time of the financial crisis of 2008; and it was the top one per cent that accounted for most of this, its share rising from nine per cent to about twenty per cent in the 2000s (Piketty 2014, 296). In other words, the top one per cent accounted for eleven of the additional fifteen points of national income going to the top decile. In 2007, the one per cent’s share of national income equalled that reached on the eve of the stock market crash of 1929, ‘with nearly one in every four dollars accruing to this tiny slice of American society’ (Hacker and Pierson 2016, 182); and roughly half of the one per cent’s income went to the exiguous top 0.1 per cent, which averaged 184 times the income of the average for the bottom ninety per cent (Formisano 2017, 2). Thus, national income continues to grow, but the growth goes to the very top, with the richest ten per cent taking seventy-five per cent of the growth from 1977 to 2007, with sixty per cent going to the richest one per cent (Piketty 2014, 297). This ‘hyper-concentration of income’ (Hacker and Pierson 2010, 38) is directly owing in part to the unprecedented scale of the salaries paid to the top echelon of business managers in both the financial and nonfinancial sectors (Piketty 2014, 303), an echelon that apparently enjoys the discretion to set its own exorbitant remuneration packages. For the bottom ninety per cent, in contrast, the annual rate of income growth over these years was less than 0.5 per cent, lower than the annual increase in household income, with median income falling further and poverty increasing in the 2000s, even before the financial crash. This means that the share of the growth in national income of the roughly 300,000 people in the top tenth of the one per cent was about one and a half times as large as the slice going to the 180 million people in the bottom sixty per cent, a degree of inequality redolent of the ‘capitalist oligarchies, like Brazil, Mexico, and Russia’ (Hacker and Pierson 2010, 36). This is the highest share of income going to this group since records began in 1913 and the financial crisis of 2008–2009 did nothing to reduce it. The share of the top decile, exclusive of capital gains, was higher in 2010 than it was in 2007, and higher again in 2011; and it is calculated that if inequality

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increases at the same rate then the top decile will be raking in sixty per cent of national income by 2030 (Piketty 2014, 294). It is inescapable that in conditions of such extreme inequality the economy has stopped working for middle-class and working-class Americans. Thomas Piketty argues that if the rate of return on capital remains significantly above the growth rate of the economy overall for an extended period of time—as it did through much of history before the nineteenth century and may well do again in the twenty-first century—then there are likely to be greater extremes of inequality because it logically follows that inherited wealth grows faster than output and income (Piketty 2014, 25); and he demonstrates that a substantial and growing inequality of capital income in America since 1980 accounts for about one-third of its growth in income inequality overall (Piketty 2014, 300–301).1 This matters because the inequality of wealth in America is as extreme as its inequality of income. America’s average per capita net wealth is the fourth highest in the world, after Switzerland, Australia and Norway, but its median net wealth puts it in nineteenth place, behind every rich country except Israel; and this is because the richest one per cent own more than a third of its wealth and the top ten per cent more than three-quarters, with no other rich country coming close to this level of concentration (Hacker and Pierson 2016, 36–37). For Stiglitz, it is not the rate of return to capital that matters so much as this concentration of wealth, which may simply be an effect of rising asset prices that depend on increasing ‘rents’, whether to resources with a fixed supply like land and real estate or to monopoly control and market power. The assertion of such control depends in large degree on political inequality and the transformation of economic power to the political power to pursue specific policies like lowering top rates of tax and deregulating financial markets (Stiglitz 2015). In this view, both the domestic economy and globalization have been ‘mismanaged’ under pressure from ‘special interests’—a very American euphemism—that are the interests of the one per cent. The scale of income returned from rents has increased exponentially since the turn of the millennium as mergers have reduced competition to just a few dominant companies across key sectors of the economy, with nearly a third of all industries now competing in markets that meet the federal anti-trust standard for ‘highly concentrated’. Far from deploying resources to take innovative entrepreneurial risks, the extremely wealthy seek gains through the distorted markets that render ever-higher rents (Stiglitz 2015), and the higher the income from rents the greater the costs

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imposed on consumers. Most critically, these modern ‘robber barons’ are successful in converting their market power into the political power to pursue policies that either distort markets or prevent government from reforming markets (Hacker and Pierson 2016, 271–272). The new barons do not therefore need public subsidies or favourable loans; they simply require a compliant federal government that allows them to impose their lucrative tolls on society. In the past, such demands were tempered by the policy process in Washington, but today the recurrent gridlock in the policy process and the active collusion of party leaders, especially from the Republican Party, in these ‘sins of omission’ has allowed the concentration of immense wealth for the very few and the accumulation of costs for the many, including higher prices, higher taxes, lost growth and rising environmental and financial risks. This fusion of economic and political power is the definition of oligarchy, but its systemic qualities have been characterized as ‘twenty-first century feudalism’ (Hacker and Pierson 2016) or ‘neo-feudalism’ (Streeck 2016, 27–28) in order to capture the extremity of these inequalities. But the feudal barons of old depended entirely on the direct control of the labour and lives of those who inhabited their feudal estates. The modern rent-seeking oligarchy, to the contrary, is so far detached from the society from which it extracts its wealth that it can act entirely independently of it; and this is a problem of moral hazard (Lasch 1996). The Reagan Revolution provided the political ideology of small government and free markets, as well as its emblematic policies of financial deregulation and the radical reduction in federal tax rates on the wealthy. But this might have mattered little had it not been for the transformation of the finance industry itself by the creativity and competitive ethos of a generation of talented and ambitious bankers who drove the rapid growth in the size, profitability and wealth of the financial sector (Johnson and Kwak 2011, 38). Between 1975 and 2007, wages and salaries in the sector roughly doubled as a share of national income, while between 1980 and 2007, financial services expanded their share of company profits from thirteen to twenty-seven per cent (Hacker and Pierson 2010, 66). Over this period the financial sector created many new businesses, multiplied its links with nonfinancial corporations, and went through a series of mergers that culminated in the emergence of a handful of megabanks that manufactured and underwrote securities and traded both securities and derivatives until they had trillions of dollars in assets under management (Johnson and Kwak 2011, 42). Whether

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their roots were in commercial banking or confined to investment and brokerage their resources were funnelled into the high-risk, high-profit world of modern financial instruments. But none of this would have been possible without the political muscle that enabled the sector to remove the regulations that targeted speculative excess and conflicts of interest and to bamboozle attempts to regulate its riskier innovations like the packaging of subprime mortgages. This is the power wielded by the new financial oligarchy, symbolized by the thirteen biggest banks which precipitated the financial crisis of 2008 and then had the effrontery to demand that federal government bail them out (Johnson and Kwak 2011, 11) in an unprecedented manoeuvre that effectively privatized their profits while socializing their losses. Yet in the first three years after the crisis ninety-five per cent of the increase in national income went to the top one per cent, while after six years median wealth was still down forty per cent from pre-crisis levels (Stiglitz 2015). This oligarchy ruthlessly stymied any attempt at fundamental reform, leaving its business practices unencumbered and the level of its rents unchanged. In the meantime, deregulation and the aggressive pursuit of profit attracted capital from all over the world, allowing the American financial sector to mutate into the financial sector of global capitalism, absorbing or eliminating rivals overseas (Streeck 2016, 23), and successfully escaping democratic control, not least in America itself.

The Private Command of Public Policy There are thus good reasons to suppose that an oligarchy or oligarchies may dominate certain specific but strategically important areas of policymaking in the United States, but ‘how might this be possible within formally democratic rules of the game?’ (Winters and Page 2009, 740). The most obvious answer is oligarchic influence on electoral outcomes through campaign contributions, often channelled through corporate Political Action Committees or PACs. In 2014, for example, some 32,000 donors—one per cent of the population—accounted for some thirty per cent of all campaign fund-raising that the PACs disclosed to the Federal Electoral Commission, with the financial sector, and the securities industry above all, contributing the largest share (Formisano 2017, 8). But campaign contributions play a relatively small role in comparison with the 30,000 or so registered lobbyists in Washington D.C., whose exclusive raison d’e  tre is to extract benefits, broadly writ, for the special interests who pay their bills. The rapid build-up of lobbying organizations and

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offices in D.C. began in the 1970s, and today the huge bulk of the billions spent every year on politics goes to lobbying not to electoral contests, by a factor of some six to one (Johnson and Kwak 2011, 45). The result is a growing mismatch between the relentless pressure of modern and efficient lobbying operations and the dwindling capacity of government to channel and check these pressures (Hacker and Pierson 2016, 323); and this diminished capacity is itself the result of the consistent disinvestment in, and the increasingly fragmented nature of the administrative agencies of the State, which leave the American pluralist system uniquely vulnerable to penetration by narrow special interests.2 This may in part explain the ingrained American tendency to reward, distribute and subsidize through the tax code, so targeting specific groups through the back door rather than providing general benefits through direct public expenditure, with the consequence that the tax code is a byzantine assortment of specific rules, complications and exceptions that routinely favours those with the resources to employ teams of top tax lawyers to protect them. These realms of influence—lobbying and campaign contributions, not to mention the concentrated and corporate mass media—have been recognized and debated for some time. The novelty that accompanies the rise to pre-eminence of the financial oligarchy is the ‘Wall Street-Washington corridor’ (Johnson and Kwak 2011), where the executives of the big banks—often top-tier fund raisers with their own lobbyists—move into top jobs in the federal administration where government can benefit from their financial expertise, while top government officials can absorb the protocols and know-how of the world of finance in the expectation of a move to Wall Street.3 This continuous flow and contra-flow represent a new development in patrimonial State formation, as well as a political guarantee for the top one per cent that their interests are now at the very heart of government. American political analysis has a long tradition of group theory that in its most recent manifestation concludes that ‘groups and partisan loyalties, not policy preferences or ideologies, are fundamental in democratic politics’ (Achen and Bartels 2016, 18). If groups are so central to the political process then it clearly matters that some groups are immensely more powerful both economically and politically than others, but the theory appears to pay little attention to inequality per se. Yet all the data indicate that inequality in America is extreme and that it is growing more extreme year on year, with the proportion of national income gains going to the top one per cent increasing from forty-five per cent under Clinton,

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to sixty-five per cent under Bush, to ninety-three per cent after the financial crisis of 2008 (Streeck 2014). On the assumption that economic inequality inevitably translates directly to political inequality it is argued that all 300,000 individuals in the top tenth of the top one per cent of the ‘wealthiest households’ can be seen as ‘potential oligarchs’ (Winters and Page 2009, 738). But any attempt to identify the oligarchs is unlikely to advance the analysis very far. Oligarchic identities will vary across time and space according to historical circumstance and economic, political and cultural contexts. The focus should therefore rest on the conditions and operation of oligarchic rule; and this is not just a question of sharks and minnows, or corporations and workers, or media conglomerates and individual bloggers (Achen and Bartels 2016, 325–326), but a question of government. American oligarchs do not rule directly. They are perfectly content to live alongside a representative government, an administrative State and the rule of law, because political democracy clearly poses no threat to their wealth that cannot easily be contained (Streeck 2016). But this depends, at least in part, on the emergence of a ‘political class’ (Mosca 1939) that serves to channel income to the oligarchy and defend its accumulated wealth.4 For Mosca the role of the patrimonial State in guaranteeing the conditions of oligarchic rule is routinely projected and reproduced through a political class of this kind that comfortably adapts to different institutional templates within democracy, frequently finds expression in political families, clans or tribes, and typically survives generational change. It is alleged that just such a ‘self-perpetuating and self-aggrandizing political class’ exists in America (Formisano 2017, 1),5 with its apex in Congress and the higher echelons of the federal administration. Thus, virtually all senators and most of the representatives in the House are members of the top one per cent and are sustained and rewarded by the top one per cent, as are the key executive branch policymakers on trade and economic policy (Hacker and Pierson 2010), so it comes as no surprise that by every statistical test imaginable there is a strong association between the voting behaviour of senators and the preferences of their most affluent constituents (Bartels 2009, 188). It is also alleged that these circumstances create a ‘culture of corruption’ that ‘induces many to abuse positions of power to emulate or rise to the one percent’ (Formisano 2017, 2).6 Put more pithily, the reason for the extreme inequality in America is that ‘the top one percent want it that way’ (Stiglitz 2015).

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The rise and rise of the financial oligarchy saw the balance of power shift decisively away from the elected constitutional government towards the unelected and largely unaccountable oligarchy. This was not the result of ‘bribes or kickbacks or blood ties to important politicians – the usual sources of power in emerging markets plagued by “crony capitalism”’ (Johnson and Kwak 2011, 56), nor to special access to government funding or contracts, but to a highly favourable tax regime and to a permissive regulatory regime engineered to suit oligarchic interests. The tax regime became far less progressive, especially at the very top, with lower top rates of income tax, lower capital gains tax, all in addition to extensive tax avoidance, especially by the very rich (Hacker and Pierson 2010, 45). The regulatory regime invited successive waves of product innovation and risk-taking that generated record profits for Wall Street but also created the largest financial bubble in modern economic history. No wonder the surveys show that there is wide public distrust of government, now seen to be hostage to special interests, with barely half of those eligible to vote now turning out for national elections (Streeck 2014). When the bubble finally burst in 2008 the main culprits, the big banks, immediately sought out their agents in the State administration— not least Hank Paulson, the former boss of Goldman Sachs and treasury secretary under George W. Bush—to argue for a bailout on the grounds that they were crucial to the stability of the financial system overall and therefore ‘too big to fail’. In effect, government was asked to rescue the economy from the finance markets and rescue the finance markets from themselves, which was tantamount to a claim that the nation’s economic future depended on the fate of just six banks.7 Jefferson would have been turning in his grave. It subsequently emerged that these banks had been deeply complicit in illegal transactions, despite the highly permissive regulatory regime, and had agreed to pay some US$100 billion in outof-court settlements by June 2014, and some US$260 billion by the next year, if both European and American banks are included in the calculation (Streeck 2016, 30). Note that none of these cases ever went to trial and so guilt was never established. But by the time the settlements were made this hardly mattered because the damage was done. The spending on the bank bailouts and stimulus packages, alongside the longer-term loss of growth, greatly increased the debt ratio and precipitated an enduring fiscal crisis. Total American debt, including private households, private and public enterprise, the finance industry, and government had risen

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from five times GDP in 1980 to nine and a half times GDP in 2008, and kept rising in the subsequent years. In his seminal work on empirical democratic theory, Joseph Schumpeter argued that democracy is simply a ‘method’ for mitigating and constraining oligarchic ambition and caprice (Schumpeter 1943; and see Chapter 2). In America today it appears that the ‘method’ is no longer working as an effective bulwark against oligarchic presumption. It may be that voters are simply not doing what conventional theories of voting behaviour suggest they should be doing to hold government to account (Achen and Bartels 2016), and it has even been suggested that the ‘structures of power and decision-making’ sometimes need to be protected from the people, from excessive input, in order to safeguard democratic goals ‘from the predatory inclinations of a transitory political elite’ (Pettit 1998, 303). But this appears to miss the point entirely. The oligarchy is not and never has been transitory, though the mode of oligarchic rule has changed from one historical period to another; and democratic institutions and procedures, incomplete and fractured for most of American history, have served successfully from time to time to re-balance the relationship between the oligarchy and the people. But this relationship is currently more skewed and out of kilter than at any previous moment, with the possible exception of the late 1920s, because the extremes of economic inequality have distorted the political process and rendered the oligarchy impervious to democratic contestation. The costs of these extremes are largely born by the American people, and although it is usually ‘identity politics’ that occupies the foreground in current political debate, ‘the class divisions within communities or identities otherwise defined are greater than the divisions between the identities themselves’ (Putnam 2015). So radical and graphic are these class divisions that they describe ‘two nations’ between which—in the words of Benjamin Disraeli—‘there is no intercourse and no sympathy; who are as ignorant of each other’s habits, thoughts, and feelings as if they were dwellers in different zones, or inhabitants of different planets; who are …not governed by the same laws…THE RICH AND THE POOR’ (Disraeli 1845).8 America is the richest nation on earth but ranks just seventeenth in the UN’s Human Poverty Index because its poor are so very many and so very poor. The remedy for these extremes was always sought in America’s much vaunted social mobility. But social mobility, both relative and absolute, has declined dramatically over the past fifty years, and America now has the lowest levels of intergenerational upward mobility

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of any advanced capitalist economy (Stepan and Linz 2011, 852). There is a remarkable and consistent degree of consensus among Americans that inequality of opportunity is indefensible, but it is a fact that for one of the ‘two nations’ the American Dream is now dead. The character of the American oligarchy has changed. Its composition has changed with the rise of a powerful and quasi-autonomous financial oligarchy; and its disposition has changed, so that it is no longer national in sentiment, civic in commitment or republican in beliefs. These changes have created a wide realm of moral hazard extending far beyond the perverse incentives induced by the bailouts of the major banks; and it may appear at first sight that it is the changing character of the oligarchy that has driven the transition to a new mode of oligarchic rule. But what is constant in oligarchic rule is the private incursion into the public sphere—the partial and intermittent dissolution of the legal divides between the public sphere and oligarchic interests; and all the evidence suggests that it is the more comprehensive and complete private command of public policy that has caused the extremes of economic inequality and of social and political exclusion. This development began in the 1970s, precipitated by the 1960s breakdown of the central oligarchic alliance underpinning American democratic politics and its comfortable accommodation with oligarchic interests; and accelerated over subsequent decades. At the same time, the formation of the patrimonial State itself broke new ground with the traditional nexus of the American party-State in Congress becoming a more blatantly oligarchic domain, as it was at the time of the founding, and the higher reaches of the executive apparatus of the administrative State in thrall to direct oligarchic influence. As a result, there is a marked shift in the balance of power from State to oligarchy that entails political and procedural changes in the modus operandi of the democratic regime (see following chapter). Thus, it is the changing mode of oligarchic rule that changes the character of the oligarchy, though the ‘financialization’ of modern capitalist economy and the dynamism of the financial sector itself clearly played their part; while feedback loops from this ‘oligarchy transformed’ have heightened the extremes of inequality and exclusion that are so damaging to the American republic.

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Notes 1. But whereas in 1929 capital income (mainly dividends and capital gains) was the primary source of income in the top one per cent of the income hierarchy, in 2007 this was only true of the top 0.1 per cent. 2. This same fragmentation explains the institutional drift that contributes to policy inertia and the difficulties of reforming the system itself (Hacker and Pierson 2010, 53). In a slightly different vein, but consistent with our argument, the authors point to the ‘biggest barrier’ of the past few decades which is the dramatic rise in use of the Senate filibuster, which allows small partisan minorities to block action supported by large public majorities, so exacerbating policy drift and permitting the degrading of government agencies, not least the IRS. In a later publication (Hacker and Pierson 2016, Chapter 10), they allege that these developments constitute a full-blown ‘crisis of authority’. 3. This ‘corridor’ recalls the presence of the ‘establishment’ that coincided with and reflected the zenith of the oligarchic alliance from the New Deal years to the 1960s. 4. It was Mosca’s unvarying view throughout his life that all societies— irrespective of their particular political organization (monarchy, republic, aristocracy, democracy)—are always divided between rulers and ruled, between a small minority of power-holders and a large majority of the powerless, because the organized minority can always impose its will on the disorganized majority. This view was formed early in his life from his experience of the Italian South—nota bene—post-Risorgimiento, where the introduction of representative politics did little or nothing to loosen the political grip of deeply entrenched clientelist networks (Hirschman 1991, 51–54). Pareto agreed that oligarchic domination was a constant of history (the political equivalent of Pareto’s Law), but emphasized oligarchic ‘spoliation’ as a means to wealth, with the state acting as a ‘machine of spoliation’ in the service of the oligarchy (Pareto 1991). Once again, no matter whether the political system is characterized as oligarchy, plutocracy or democracy, the spoliation continues unabated. 5. Although this class may be most visible in Washington D.C. Formisano casts the net much wider to encompass ‘regional and state political and economic elites occupying a broad array of institutions in and out of government, tied together by ambition, interest, and mutual benefit’ (Formisano 2017, 1). 6. Formisano sets out to assemble an impressive amount of evidence, albeit mainly anecdotal, to demonstrate the pervasive presence of this ‘culture of corruption’. This jumble of stories and scandals reveals the kickbacks, backhanders, nepotism and underhand dealing that infect the highly intricate and mutually beneficial relationships between the political principals and

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their satraps in law firms, administrative bureaux, lobbying outfits and the mass media. If this collection of unethical and often grotesque behaviour is to be believed, it demonstrates a comprehensive lack of vocation or ambition for public service, a morally bankrupt ruling class. 7. Bank of America, JPMorgan Chase, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley. 8. Benjamin Disraeli’s novel Sybil or Two Nations was first published in 1845 just one year after the publication of Fredrick Engel’s The Condition of the Working Class in England (Engels 1844).

References Achen, Christopher H., and Larry M. Bartels. 2016. Democracy for Realists: Why Elections Do Not Produce Responsive Government. Princeton: Princeton University Press. Bartels, Larry M. 2009. Economic Inequality and Political Representation. In The Unsustainable American State, ed. Lawrence Jacobs and Desmond King. Oxford: Oxford University Press. Cohen, Lizabeth. 2009. A Historian’s Reflection on the Unsustainable American State. In The Unsustainable American State, ed. Lawrence Jacobs and Desmond King. Oxford: Oxford University Press. Disraeli, Benjamin. 1980 [1845]. Sybil or The Two Nations. London: Penguin Classics. Engels, Friedrich. 1993 [1844]. The Condition of the Working Class in England. New York: Oxford University Press. Formisano, Ron. 2017. American Oligarchy: The Permanent Political Class. Champaign Urbana: University of Illinois Press. Hacker, Jacob S., and Paul Pierson. 2010. Winner-Takes-All Politics. New York: Simon and Schuster. Hacker, Jacob S., and Paul Pierson. 2016. American Amnesia. New York: Simon and Schuster. Hirschman, Albert O. 1991. The Rhetoric of Reaction. Cambridge, MA: Harvard University Press. Johnson, Simon, and James Kwak. 2011. 13 Bankers: The Wall Street Takeover and the Next Financial Crisis. New York: Pantheon Books. Lasch, Christopher. 1996. The Revolt of the Elites and the Betrayal of Democracy. New York: Norton. Mosca, Gaetano. 1939. The Ruling Class. New York: McGraw-Hill. Pareto, Vilfredo. 1991. The Rise and Fall of Elites: An Application of Theoretical Sociology. New Brunswick: Transaction Publishers. Pettit, Philip. 1998. Republicanism: A Theory of Freedom and Government. Oxford: Clarendon Press.

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Piketty, Thomas. 2014. Capital in the 21st Century. Cambridge, MA: Harvard University Press. Putnam, Robert. 2015. Our Kids: The American Dream in Crisis. New York: Simon and Schuster. Schumpeter, Joseph. 1943. Capitalism, Socialism, Democracy. London: George Allen and Unwin. Skowronek, Stephen. 2009. Taking Stock. In The Unsustainable American State, ed. Lawrence Jacobs and Desmond King. Oxford: Oxford University Press. Stepan, Alfred, and Juan J. Linz. 2011, December. Comparative Perspectives on Inequality and the Quality of Democracy in the United States. Perspectives on Politics 9 (4): 841–856 (Review Essay). Stiglitz, Joseph E. 2015. The Great Divide. New York: Penguin Books. Streeck, Wolfgang. 2014. Buying Time: The Delayed Crisis of Democratic Capitalism. London: Verso. Streeck, Wolfgang. 2016. How Will Capitalism End?. London: Verso. Winters, Jeffrey A., and Benjamin I. Page. 2009. Oligarchy in the United States? Perspectives on Politics 7 (4): 731–751.

PART III

Comparing Oligarchic Rule, South and North

CHAPTER 7

Polity in the Americas

Abstract This chapter departs from Aristotle’s notion of the mixture of oligarchic and democratic rule as a ‘polity’ and adapts it for the modern period as a prelude to the comparison of the composition of the polity, North and South. This cannot be a static comparison because of the oscillation between periods of oligarchic ascendance and periods of democratic renewal within the ambit of polity. This becomes evident as the comparison advances across all available criteria and categories, including the timing of the transitions from one mode of oligarchic rule to another and the principal political contents of the distinct modes of rule themselves. Possibly the most significant conclusion to be drawn from this comparative analysis is the remarkable convergence between North and South in recent decades in both the composition of the polity and the mode of oligarchic rule alike. Keywords Polity · Oscillation · Period · Transition · Convergence

Comparing Polities, South and North The notion of a polity is widely familiar but its meaning in current and recent usage is vague and unfixed, making it nothing more than an analogue of political system. It was Aristotle who first proposed the © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 J. Foweraker, Oligarchy in the Americas, https://doi.org/10.1007/978-3-030-63146-8_7

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concept of polity as the amalgam of oligarchy and democracy that might best provide ‘the adequate security against governmental injustice that Oligarchy and Democracy fail to give’ with ‘the most perfect type of Polity [being] a form of government in which these opposing principles are perfectly balanced’ (Sidgwick 1892, 143). In the modern period, oligarchy and democracy have mainly been seen as mutually exclusive, but the idea of polity has been retrieved in recent years to claim that the two can ‘coexist comfortably’ and indeed ‘be fused integrally’, with the corollary that representative government can change ‘the character and extent, but not the fact, of majority exclusion’ (Winters and Page 2009, 731).1 But it must be recognized that Aristotle viewed polity as a matter of constitutional design and prescription in the context of citystates where government was made manifest and immediate in citizens’ assemblies; whereas contemporary polities are the outcome of complex processes of economic and social change, State formation and democratization. Aristotle’s notion can therefore only provide the inspiration rather than the model for a modern polity that combines the two distinct domains of oligarchy and democracy in a contradictory and syncretic system that is bound together—not always securely—by a mixture of formal and informal rules that permeates the formal separation of the public and private spheres (see Chapter 2). In this way, the ‘opposing principles’ of oligarchy and democracy are conjoined in polity, but they are never—or never yet—‘fused integrally’. To the contrary, the political system of polity is beset not only by the characteristic democratic contradictions between social and economic inequality and formal political equality, but also by the inevitable tensions between the two distinct forms of power-holding implicit in oligarchy and democracy. The concept of the modern polity does not simply seek to restore an historical sociology of democracy as a counterweight to an exclusive focus on democratic institutions, but to define and describe a new and different object of inquiry (Foweraker 2018, Chapters 1, 2 and passim). Rather than tell a teleological story about the progress of democracy and its success in sloughing off historical legacies and countermanding the protean presence of oligarchy, it offers a different interpretation of democratic politics itself. All polities have things in common because some internal linkages in polity like private property and patrimonial practices are relatively constant. But they may also vary according to the maturity of the democratic sphere, the reach and efficacy of State administrative

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institutions, especially the rule of law, and the historical weight and political profile of the oligarchy,2 that are themselves determined inter alia by national patterns of State formation and shifts in international political economy. In many ways, the key to the historical evolution of polity is the process of patrimonial State formation and its dual role of protecting and projecting oligarchic interests by shaping and constraining the democratic regime and the conduct of democratic government; and there is little doubt that it is versions of the patrimonial State that are prevalent in the world,3 even if it is the image of the Weberian legal-rational State that informs the premises of most democratic constitutions. Thus, polity may be identified wherever a democratic regime has taken root and democratic institutions serve in some degree to organize and legitimate the face of public power, but where the formation of a patrimonial State and a lack of autonomy of the democratic regime from the State together contribute to deviations from the norms of democratic accountability, the rule of law, equality under the law and the adherence to formal rules. This is in no wise equivalent to an assertion that democratic values and democratic struggles do not matter or that there is no point in pursuing democratic reforms. But it does suggest that democratic reversal is just as likely as democratic advance (Tilly 2007), that both can occur and recur within the ambit of polity, and that democratic government is doomed to be ever imperfect, and not just because a moving normative horizon will ensure it remains so. It is the evolution of polity that makes the imperfections intelligible. Aristotle defended polity as the best hope of achieving good government in conditions of inequality, which is simply that form of government that can promote the good life—the whole point of the polis. Democracy was potentially dangerous because of its tendency to descend into demagoguery, while oligarchic rule was corrupt in the same degree that it was exclusionary and therefore incapable of securing the good of the community overall by defending the res publica (see Chapter 2). It was subsequently argued that the current neoliberal mode of oligarchic rule in Latin America fails to recognize the flourishing of the community as the proper aim of government, and systematically defends the powers and prerogatives of the few at the expense of the life chances of the many (see Chapter 3). Indeed, it is claimed that the guiding principle of modern liberal thought is that government should remain neutral on the question of the good life and refrain from promoting moral values, while providing the fair procedures and a framework of rights that respects

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people’s freedom to choose their own values and pursue their own ends. In the United States, the community life it endorses has been dubbed ‘the procedural republic’ (Sandel 1996, 4), and its dual appeal derives from the image of individuals as free and independent and as deserving of equal respect. One among many objections to this principle is that it creates a moral void that invites a narrow and intolerant politics and fails to equip citizens to share in self-rule and sustain the kind of political community that can best defend true liberty (Sandel 1996, 24). But surely the most cogent objection is that it does not address the political consequences of oligarchic rule in conditions of extreme social and economic inequality. In this, it is entirely congruent with the predominant pluralist tendency in the American study of politics, which eschews unequal relations of power in favour of competing interest groups with cross-cutting agendas that eventually balance each other out to produce tolerably democratic outcomes (Dahl 1961, 223–228). This emphasis on a self-regulating pluralist system successfully excluded the State from the vocabulary of American political science in the post-War period and celebrated American democracy as ‘the good society itself in operation’ (Lipset 1959, 439).4 The history of the United States has been punctuated by democratic attempts to place oligarchic rule in check and renew the republican ideal. One such was the anti-trust movement of the Progressive era (see Chapter 4), with its message still resonating in President Roosevelt’s admonition to Congress in 1938 ‘that the liberty of a democracy is not safe if the people tolerate the growth of a private power to a point where it becomes stronger than their democratic State itself’. In similar vein, but some seventy years later, Barack Obama—yet to begin his run for the presidency—intoned that ever since the time of Hamilton and Jefferson Americans had struggled to maintain a proper balance between ‘the concentration of wealth and power and the necessity of transparency and opportunity for each and every citizen’ (Hacker and Pierson 2010, 255). In this view, there is a clear oscillation between periods of drift when oligarchic rule advances unchecked and periods of renewal and reform that seek to impose more stringent controls on markets and big money, described above as the oscillation between democratic advance and retreat with the ambit of the polity.5 But there is now widespread scepticism that such renewal is any longer possible in the face of an entrenched pattern of oligarchic rule that remains largely unaccountable to a Congress weakened by polarized parties and blocking coalitions (see Chapter 6). The

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scepticism extends to the capacity of the electoral cycle and of representative government itself to produce a clear mandate for policy change, even at moments of landslide victories and watershed elections. Rather than ‘throw the bums out’, elections simply ‘put a different elite coalition in charge’ (Achen and Bartels 2016, 312); they do not drive renewal but, at best, promote a ‘circulation of elites’—in Pareto’s phrase—in the higher echelons of the State. A public and very Jeffersonian suspicion of the new financial oligarchy has grown in the aftermath the financial crisis of 2008–9, but it appears impervious to the faltering democratic attempts to regulate its activities and curb its powers.6 The public frustration at the failure to curtail oligarchic excess is rooted in stagnant or declining real incomes and the increasingly partial and inadequate provision of essential public goods. At the same time, the ‘circulation of elites’ reinforces the perception of a political class that serves its own interests—and those of the oligarchy—at the expense of the common and civic interest vested in the republic (see Chapter 6). The perception of such a class tends to reflect the patrimonial practices that defend oligarchic interests, and it thus provides a useful gauge of the presence of the patrimonial State in the polities of the Americas and beyond. In Latin America, this class is described—often in culturally specific terms—as the oligarchy, while elsewhere it may simply be seen as some form of political establishment or elite that serves as a surrogate for the oligarchy writ large. But wherever its public profile appears unperturbed by the failure of party politics and political representation to bring about change, it may become the focus of populist animus and the electoral mobilization of marginal and minority groups against ‘the system and its elites’ (Streeck 2016, 20). The inexorable rise of the financial oligarchy in the United States—and its international reach—provided just such a focus for the right-wing, nativist and protectionist populism of the Trump campaign for the presidency. In a polity already unbalanced by the overweening powers of the financial oligarchy the Trump presidency has served to dismantle the administrative capacity to mitigate these powers by a concerted attack on democratic values and procedures. Although the American presidency has remarkably few formal powers itself, executive power has nonetheless grown through the evolution of the administrative and national security State, while political polarization and partisan control of Congress has led recent presidents to rule by executive action and orders; and this has encouraged the incumbent president to increase partisan control of the Supreme Court,

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the Justice Department, the Federal Bureau of Investigation, and even congressional oversight. Furthermore, this brand of populism is itself polarizing and often destructive of common civic membership and status, with renewed racial discrimination through voter suppression and the assaults on the Voting Rights Act and deepening racial antagonism fed by inflammatory populist rhetoric (Lieberman et al. 2019, 472–474). Thus the second Gilded Age (Gerstle 2009) is marked not only by the extremes of inequality but also by the many divides of race, class, region, urbanrural, party and tribe that culminate in a pervasive distrust of government; while government itself is marked by mutual distrust across party lines in the legislature and an increasing intolerance of dissent.7 In his last and posthumous work, Christopher Lasch decries the ‘democratic malaise’ that has infected the United States, but it is clear from the outset that his real concern is with the deteriorating character of the oligarchy and the consequent decline of republican ideals. The oligarchy is no longer rooted in community, dedicated to philanthropy and republican-minded, but global, heartless and without national identity.8 In his view, the phenomenon of the ‘circulation of elites…strengthens the likelihood that elites will exercise power irresponsibly, precisely because they recognize so few obligations to the predecessors and the community’ (Lasch 1996, 41). But the oligarchy’s capacity to exercise its power in this way depended on the developments in patrimonial State formation over the previous decades. As recounted in Chapters 4 and 5, the fragmentation and decentralization of the federal government of the New Deal allowed local oligarchies in the states and regions to appropriate powers that formally belonged to the central State; but in the following years oligarchic interests proved just as capable of penetrating central State institutions, often with the tacit or explicit support of the federal courts which worked to exempt corporations from State control by treating them legally as ‘individuals’ (McConnell 1966). Thus, the increasing fragmentation of the central State did not insulate public power from oligarchic influence but rather made State administrative institutions easier to manipulate, and this explains in great part why the egalitarian gains of the New Deal did not endure. The growth of the federal State had initially sustained a form of government where most policy issues were ‘locked in’ by constitutional assumptions and legal rules, and this included race relations, labour relations, property relations and much else beside. But the gradual dissolution of the division between public authority and private interests led to the extension of ‘discretionary’

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policymaking to an increasing number of separate policy domains, each relatively isolated one from the other, to a degree that made the State administration as a whole both incoherent and inconsistent (Skowronek 2009, 335). Paradoxically, as the central State administration pulled apart so patrimonial practices reached further and higher into its executive command centres, so achieving an ever less mediated mode of oligarchic rule.9 A synoptic overview of the specific features of the Latin American polity might include the high political profile and economic weight of the oligarchy, but also its cultural bravura and generational continuity; the particular pattern of patrimonial State formation, and the active role of the State in protecting and projecting oligarchic rule, often through the close ties of family, clan, party and camarilla (the extended political family), as well as those between oligarchs and State mandarins (compare Miliband 1970); the pervasive presence of clientelism in political institutions and political practice; the recurrent resurgence and consequent ‘normality’ of populist politics; and, paradoxically for some, the extraordinary vibrancy of its electoral politics (see Chapter 3). In a Latin American perspective, this picture would be familiar and largely uncontentious. In an American perspective, it would be unfamiliar, exotic and possibly comforting insofar as it might explain the vagaries and vicissitudes of democracy in the southern continent. Yet it is now apparent that the polity of the United States has a range of characteristic features that resemble those of Latin America, including a predominant and prepotent financial oligarchy that flaunts its wealth and political influence; its own pattern of partypatrimonial State formation, an equally active role for the State in the reproduction of oligarchic rule, and its own political families and indeed dynasties, with oligarchic power channelled through the Washington-Wall Street corridor; and its own clientelism manifested in ‘machine politics’, gerrymandering, massively endowed political actions committees (PACS), powerful political lobbies and political clans. Like Latin America, it has its own brand of raucous and sometimes vicious electoral politics that is only matched by the extensive influence of financial capital and corporate power in both the electoral arena and the policymaking process10 ; and like Latin America it has its dramatic moments of populist insurgency that tend to coincide with periods of ‘high oligarchy’ at the turn of the twentieth century and again today, apparently provoked by the remoteness of the self-serving and brazen political class that is the Washington establishment. This condensed comparison elicits the enticing conceit

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that the polity of the United States has come to resemble that of Latin America ever more closely, and indeed appears increasingly as a—slightly distorted—mirror image of its neighbours to the South. What may be distinctive, possibly exclusive to the United States is the degree to which the contours of the polity are disguised ideologically by constitutionalist rhetoric and the enduring republican tropes that maintain the myth of popular sovereignty despite the overwhelming evidence of oligarchic rule and oligarchic prerogatives.11 It was noted in Chapter 4 that in Florida in 1876–1878 ‘thousands of black voters were purged from the lists after being convicted of petty crimes’ (Tuck 2009, 140). At the turn of the twenty-first century, the treatment of minorities in the criminal justice system of the United States continued to disenfranchise a high and disproportionate number of African-Americans, especially in the Southern states like Alabama and Florida12 ; and this had a significant and possibly critical influence on the outcome of the 2000 presidential election in the swing state of Florida (Foweraker and Krznaric 2003). Indeed, this election was surely a wakeup call to any American still dreaming that legal and procedural flaws only afflicted the democracies of the South. Recall that a private firm was employed by the state government headed by the brother of the Republican presidential candidate to purge the electoral register of all (suspected) felons and ex-felons; that alleged electoral irregularities were judged by the state returning officer, a flamboyant Republican activist; that despite the scandal of the ‘hanging chads’ the winning margin statewide was just five hundred odd votes; that the Supreme Court refused a re-count by just one vote, after voting along partisan lines; and that the power brokers of the state Democrats composed their differences with their Republican counterparts in the Jockey Club, against the express wishes of their own party activists and supporters. A caricatured account, perhaps, but one that suggests that the election was compromised in some degree by the pathologies of the democracies of the South, namely patrimonialism, oligarchic prepotence, nepotism, electoral corruption and a dubious judicial impartiality. In these circumstances, it could be no surprise that Fidel Castro helpfully offered to send observers to ensure free and fair elections.

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Comparing Oligarchic Rule, South and North There appears to be a clear congruence between the exclusionary intent and practice of oligarchic rule and economic and social inequality. Latin America has long been notorious both as the most unequal continent in the world and as a land of oligarchs, while the moments of extreme inequality in the United States appear to correspond to periods of high oligarchy at the turns of the twentieth and twenty-first centuries. The exclusionary strategies deployed by oligarchies have varied over time, but today do not require their direct involvement in democratic government. In its place they can deploy instrumental power through lobbying, campaign financing, media and agenda control; as well as the structural power of being big enough to shape policy and regulatory regimes—of being ‘too big to fail’ and ‘too big to ignore’ (Fairfield 2015). Their instrumental power tends to align their incentives with those of the ‘political class’, while their structural power limits the policy options and political reach of this class (Rodrik 2008; and see Chapter 6). Yet, looking back over the modern period it is apparent that oligarchies come and go according to historical circumstance while oligarchic rule itself continues; but continuity does not preclude and can require changes in the relationship between oligarchy and political authority, and this may propel a change in the mode of oligarchic rule. Political authority itself was the main issue for both Latin America and the United States at the beginning of their modern histories. The fissiparous character of oligarchy in Latin America reflected the sharp and usually violent competition to establish political control in its regions, while oligarchy in America was similarly local in political scope, but with a settled pattern of police powers in the individual states of the Union. Competition between regional oligarchies to establish some form of central government continued for decades in most of Latin America, while this challenge in the United States was condensed and ‘overdetermined’ by the Civil War and the increasing presence of the federal government. This watershed led to a bifurcation in the political development of oligarchic rule, South and North. In Latin America, oligarchic competition appeared to set a pattern of unstable oligarchic alliances with a rapid ‘circulation of elites’ that stood in contrast to the emergence of a stable and national oligarchic alliance with a steady party expression in the United States. But such generalizations are subject to considerable variation across time and space. Several of the Latin American republics

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lived through several decades of relatively stable oligarchic alliances in this last century (see Chapter 3), while the breakdown of the core oligarchic alliance in the United States of the 1960s and 1970s precipitated a period of highly partisan political competition alongside the rise of a hegemonic financial oligarchy and the return of populism. In principle—or perhaps simply in a Weberian world—the question of political authority is resolved by the process of modern State formation. But this resolution is always compromised in some degree by patrimonial State formation with its admixture rational administration and informal clientelism. The political economy of early patrimonial State formation was similar in the Americas, South and North, insofar as it was marked by a partial and variegated capitalist transformation of the economy. This left intact many forms of indentured labour on the large landed estates of Latin America and the slave economy of the South in the United States. This left long legacies for State formation in both cases, but differently. The slow and spotty capitalist advance within Latin America continued to influence oligarchic divisions and alliances throughout the latter decades of the nineteenth and for much of the twentieth century, while in the United States the Civil War guaranteed the integrity of both the Republic and the capitalist economy but also allowed the South to impose political shackles on American democracy for decades to come. This stable but democratically suboptimal resolution was possible because of the predominantly party-State nature of American patrimonialism and Southern influence on Congress and its committees. Where this same party-State pattern was replicated in some degree in Latin America, it also provided a relatively stable form of political authority, as, by way of examples, in Colombia from the mid-nineteenth to late twentieth centuries, in Mexico from the post-revolutionary wars to the turn of the twentyfirst century, and in Uruguay until the 1970s. But State authority has remained strong throughout in the United States, whereas it has waxed and waned in the countries of Latin America. Indeed, State authority in countries like Peru, Brazil, Mexico and even Chile has become more fragile and territorially fragmented in recent years, and its legitimacy has been leached away. This decomposition of political power in Latin America is certainly of more consequence than the speciously ideological switches from left to right, and vice versa, that attract most comment and analytical attention.

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One reason for the greater stability of political authority in the United States is the centrality of its Constitution. The 13th through 15th Amendments to the Constitution shifted this authority away from states’ rights towards the federal State, but, critically, did nothing to mitigate its original and enduring oligarchic nature; while rulings from the federal courts and the Supreme Court tended consistently to favour oligarchic interests. But the Constitution also embodies a high degree of legal and judicial autonomy that generates an equally high degree of political consensus that can serve ideological purposes in disguising the large gap between the Constitution’s political principles and the reality of political practice, not least in the South of the Jim Crow era. This is all very different from the majority experience in Latin America where constitutions have tended to turn over rapidly and have usually been endogenous not exogenous to oligarchic competition and popular pressure for change; and where today they have become a privileged terrain of democratic struggles (Foweraker 2016). These differences also have clear implications for the rule of law, which may have been discretionary and often contingent on oligarchic interests and preferences in the United States, but never entirely absent given the relative autonomy of the judicial system; whereas in Latin America there were always ‘brown areas’ (O’Donnell 1999) where the writ of law simply did not run. Today these ‘brown areas’ have been transformed into ‘grey areas’ by criminal organizations that contest State authority to the point where legal and illegal actors cooperate and collude (Arias 2017) in the discretionary enforcement of the law (Auyero 2000) or, at the extreme, State authorities are completely displaced to create para-States with different rules altogether.13 All this matters to property rights that were established early in the United States (see Chapter 1), but advanced only haltingly in Latin America, where even today they remain spotty and reversible, as do most civil rights. The uncertain presence of the rule of law across much of Latin America over most of its history has always enfeebled its republican traditions because there is no possible defence of a res publica where an ineffective rule of law fails to protect the public sphere from the incursions of private interests. At first glance this again looks rather different from the United States where a strong, or at least salient republican tradition has offered recurrent resistance to oligarchic rule, especially by the financial oligarchy (see Chapters 4 and 5). This tradition is rooted in ideas of community and self-government as essential to the defence of liberty, but, as with the Constitutional consensus, these ideas have also served to camouflage the

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gap between political principle and political practice, with republicanism often sitting comfortably alongside prejudice and discrimination. The differences between Latin America and the United States in this regard may therefore be more apparent than real; and, at the very least, there appears to be a marked convergence between the two in recent decades. The presence of private interests in the public sphere of the United States had been increasing pari passu with the growth of the administrative State in the twentieth century (Chapter 5) reaching its apogee with the hegemony of the financial oligarchy (Chapter 6). This was accompanied by the emergence of a ‘procedural republic’ with its ‘aspiration to neutrality’ (Sandel 1996) and its abdication of any moral vision of a ‘good life’ vested in a republic of common rights and responsibilities. Similar to the advent of the neoliberal mode of oligarchic rule in Latin America (see Chapter 3) this has meant State retreat from market regulation, oligarchic rule that is mainly justified by ‘free market’ criteria, and a pervasive patrimonialism that damages democratic contestation. Paradoxically, these developments were preceded—in some degree impelled—by the ‘late democratization’ of the United States in the 1960s and by the spate of democratic transitions in Latin America in the 1980s, which together created a new democratic universe in the Americas. The convergence of oligarchic rule in the Americas, South to North, is driven by their common and ever more acute challenge of reconciling oligarchic rule with democratic government, and the common consequence is a massive increase in corruption—a common denominator of many patrimonial practices—and an increasing incidence of populist politics. Thus, oligarchic rule has remained throughout the modern period in the Americas, an accepted fact of political life in Latin America and now ever more salient in the United States. This remarkable continuity has required changes from one mode of rule to another to adapt to new historical circumstances, not least the advance of democracy itself. In Latin America, the change from one mode to another appears to coincide with defined stages of economic development, as the continent responded to changes in the global economy, the first change of mode impelled by the global crash of 1930 and the second by globalization and the shift to the neoliberal policy orientation of the Washington consensus. In the United States, these systemic effects appear to be less determinant and the transitions from one mode to another less abrupt,14 with the first change of mode beginning as early as the 1877 Compromise and the second occurring gradually over the period from mid-1970s to the early

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1990s. There is some substance in this contrast, but there is considerable autonomy in the political process of change in both cases, especially in popular mobilization and democratic struggle. In Latin America, there is considerable variation in these changes of mode, as in the contradictory nature of the Argentine case, where popular mobilization and democratic advance occurred well before 1930, only be to reversed during the conservative ‘restoration’ that followed (see Chapter 3); and where popular struggles against the military regimes of the 1960s and 1970s prepared the way for the democratic transitions of the 1980s and the dissemination of the neoliberal model. In analogous fashion, the first change in the United States was driven in part by the Progressive movement against big money and the trusts, while the second change was provoked by the collapse of the grand oligarchic alliance in the 1960s under pressure from the civil rights’ movement. In sum, the politics of the process can always complicate any correspondence between systemic periods and changes in the mode of rule, and the political conjuncture can always trump period, at least by moments.15 The politics of change also differs from North to South because the political content of the modes themselves differs. Latin America’s first mode was characterized by the politics of ‘competitive oligarchy’ (Dahl 1971) that mixed coercive rule with highly restricted democratic arrangements, while the patrimonial party-State in America’s first mode combined competitive and popular electoral politics—but not in the South—with the oligarchic manipulation of Congress. If anything, the politics of the second mode diverge more dramatically from North to South, though this varies considerably from one Latin American country to another, with a pattern of stable and consensual democratic politics in the United States—that yet depended on the local oligarchies of the South to maintain its equilibrium—and a more conflicted, constricted and cyclical democratic politics in Latin America. But, arguably, both modes became unviable once they failed to meet the challenge of reconciling democratic politics with oligarchic rule as a result of the late democratization of the United States, on the one hand, and military interventions to prevent the advance of popular democracy in Latin America on the other. Finally, with globalization, the generalization of market criteria in public policy, the financialization of economies, and the extraordinary rise and political reach of financial oligarchies, the politics of the third mode of oligarchic rule North and South begin to converge to an unprecedented and uncanny degree. This makes a comparative politics of the Americas,

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North and South, not only possible but perhaps more necessary than ever. As stated from the outset, the political development of Latin America and the United States is far more similar than commonly supposed, and never more so than they are today.

Notes 1. But Winters and Page deny that their argument implies that oligarchy dominates all aspects of democratic politics. They believe that the pluralism inherent in the formally democratic political system, as well as different forms of social mobilization and pressure group politics, can impact decisively on many matters of race, ethnicity, gender, morality, gun control and the environment. They argue that these issues are of primary importance to large groups of citizens but of only minor and cross-cutting concern to the very wealthy. Hence ‘oligarchy limits democracy but does not render it a sham’ (Winters and Page 2009, 732–733). 2. As recounted in Chapters 4 through 6, for example, the late nineteenth and early twentieth centuries in the United States was a period of ‘high oligarchy’ characterized by the emergence of industrial barons, the foundation of giant trusts, machine politics and the disenfranchisement of the freed slave population, all of which were greatly constrained during the era of the New Deal, only to come full circle in the present day of megacorporations, the dominance of the financial oligarchy, iron triangles and super PACs. 3. Since World War II protection by great powers and international institutions have combined with the decline of interstate warfare to increase the emergence and survival rate of weak states that had been colonies or satellites of great powers. In Charles Tilly’s view, it is the increasing number of ‘weak state trajectories toward democracy’ in recent decades—defined as ‘considerable democratization that precedes any substantial increase in State capacity’—that explains this prevalence because this trajectory tends to promote and support patrimonial practices (Tilly 2007, 87). 4. Lipset’s all too comfortable view of American democracy was soon to be capsized by the tumultuous events of the 1960s, not least the civil rights movement and the surge of protest provoked by the Vietnam War. 5. Hacker and Pierson’s Chapter 3 on ‘A Brief History of Democratic Capitalism’ is a perfect introduction to the American polity and the shifting balance of democratic rules and oligarchic informality (Hacker and Pierson 2010). 6. It remains unscathed and pristine, ‘the most law-abiding, hardworking, eloquent, well-dressed oligarchy in the history of politics’ (Johnson and Kwak 2011, 93).

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7. It may be the multiple divisions and antagonisms that explain the relatively low incidence of protest at increasing inequality compared to the first Gilded Age of the late nineteenth and early twentieth centuries. Despite the spread of individual rights, or possibly because of it, it appears that collective equality of condition is ever harder to attain. 8. The secession of the oligarchy from the public sphere weakens the social fabric that supports the welfare State and erodes civic virtue. The republican tradition had always seen the public realm not only as a place of common provision but also as a setting for civic education (Sandel 1996, 330). 9. This tendency to centralize and condense patrimonial practices within the federal State can be contrasted with the decentralized and dispersed patrimonialism in the individual states of the nineteenth and early twentieth centuries. 10. On a comparative view over many years it is remarkable how little electoral turnout varies between rich and poor, educated and non-educated, in virtually every country across the globe. But in this respect the United States has been an extreme outlier. So in the post-War period almost ninety per cent on average of those with high incomes (US$75,000 in dollars of 1995) turned out at the polls, but less than half of those with incomes of US$15,000 did so; while the difference in turnout between the educated and non-educated was of the order of forty per cent (Przeworski 2010, 97). Thus, social exclusion did in effect lead to political disenfranchisement in the United States over this period to a far greater extent than in Latin America. 11. González and King explain the ‘late democratization’ of the United States by focussing on three dimensions of ‘Stateness’, namely the legal—principally federalism and local state autonomy; the bureaucratic—state capacity and state self-restraint; and the ideological, especially the republicanism that has always served to obscure the gap between its foundational principles and its political practice. Taken together these attributes of the American State make American democracy directly comparable to the democracies of the ‘third wave’ and thereby discount claims to American exceptionalism (González and King 2004). 12. Losing the right to vote while serving a prison sentence is common in the West, but in fourteen US states criminals lose this right for life. Consequently, as of 2003, an estimated 3.9 million US citizens were disenfranchised, including 1.4 million who had served their sentences and another 1.4 million who were on parole or probation. Over one-third of the disenfranchised population were black males. Of this total 13 per cent were permanently disenfranchised, rising to 31 per cent in Alabama and

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Florida. Higher rates of incarceration therefore mean fewer voters among the black population (Foweraker and Krznaric 2003). 13. Beyond these pathologies there is general increase across Latin America in the social and territorial segmentation of rights, whether civil, political or social, that tend to divide its citizens into ‘two parallel universes’ defined by place of residence and socio-economic status, which are themselves closely correlated (Luna 2014). Prima facie this looks remarkably like the ‘two nations’ that have emerged within the United States (see Chapter 6). 14. It is relevant to recall that—in broad terms—the United States has been a ‘rule-maker’ in the global political economy, while Latin America has largely been a ‘rule-taker’. 15. This may seem all too obvious in the case of major events such as the two World Wars. But the lesson also applies more narrowly. Take the case of Peru which as late as the 1980s was still engaged or re-engaged in a version of ‘national-popular development’, with its eclectic mixture of heterodox policies. This model rapidly ran into a vortex of hyperinflation and plummeting incomes, with its accompanying political party fractures and systemic disarray. But the political outcomes of the crisis were ‘overdetermined’—to use the Althusserian phrase—by the security threats posed by the Sendero insurgency; and the new ‘ruling coalition’ of the early 1990s, especially after the ‘autogolpe’ of 1992, would not have been forged in the absence of these threats. This coalition comprised international finance capital, international corporations—especially those engaged in extractive enterprise, some national banking and industrial actors in a minor role, some landowners, and the army and security services; and it was a coalition that supported a mode of oligarchic rule not unlike preMariátegui Peru or the 1930s ‘restoration’ in Argentina. To specialists, this may look like a caricature, but it is an example of how conjuncture can trump period.

References Achen, Christopher H., and Larry M. Bartels. 2016. Democracy for Realists: Why Elections Do Not Produce Responsive Government. Princeton: Princeton University Press. Arias, Enrique Desmond. 2017. Criminal Enterprises and Governance in Latin America and the Caribbean. New York: Cambridge University Press. Auyero, Javier. 2000. Poor People’s Politics: Peronist Networks and the Legacy of Evita. Durham, NC: Duke University Press. Dahl, Robert. 1961. Who Governs? Democracy and Power in an American City. New Haven and London: Yale University Press.

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