Matt Stoller: Toward a New Democracy

By Matt Stoller, a Fellow at the Open Markets Institute

Yves is one of the most optimistic people I know. You may not believe it, and I don’t think Yves Smith does believe it, but she is. No one who takes on power the way that she does, and who organizes a community like the one she has, could even begin to do what she does without having a fundamental belief in the power of ideas to effect real change in our lives and in our society. And the thing is, in this attitude, she is right.

Right now, Uber is being reorganized. This is a powerful and important institution, which was set on structuring how people all over the world organize their transportation system. It is going through a management crisis, borne of all sorts of monstrous behavior.

What Yves helped do is provide one important key nugget in this story, which is that Uber doesn’t actually work as a business model. You can look at the sexism, the lawbreaking, and the various mean-spirited attempts at monopolization, which are all important perspectives. But Hubert Horan’s critique of their revenue model showed that this institution had to change. And so that’s what’s happening. At the end of the day, we have to speak the language of finance and the language of morality, together.

There’s virtually no money for someone like Yves to put this site together, and what little in advertising is being quickly siphoned away by monopolists. We know fraud pays. We know stealing pays. We know fake innovation pays. And exposing it doesn’t. Fortunately, Yves doesn’t need much, she just needs us. She needs some donations from some of us to keep this going. You can give here, via the Tip Jar, which tell you how to donate via check, credit card or debit card.

If you can’t afford anything, that’s fine. This economy is pretty volatile. But if you can afford a lot, you should give a lot, if only to help nudge our culture towards a more stable direction. The Tip Jar beckons.

This shift in the view of, say, Uber, of which Yves and this community had a small but critical part, is happening everywhere. Say what you will about the allegations of Facebook and the election, but the fact is that no one in in a policymaking position is acting like Mark Zuckerberg is anything but a political boss with political power. There are no neoliberal bromides about the perils of regulation, or growth versus anti-business rhetoric, or other nonsense. That era is over. Shattered. Gone. That’s partially because of Yves, and all of you.

So keep this going. It’s a good thing you have here. Support it by giving now.

From now on, these institutions, from private equity to banks to Silicon Valley giants, are going to have to fight on a political level for their place.

You may think, well, so what? The answer is that when people stop believing in the legitimacy of a moral system, it becomes much harder to enforce it. When the people stop believing in, say, private equity as a means to do anything but roll up industries and loot, then that industry will eventually be put under a microscope by our political institutions. We may win or lose that fight, but at least we will have it. That is what Yves has helped do. She has let us have the fight, finally.

I used to edit and write for Naked Capitalism. I’ve also worked in the U.S. House of Representatives, during the bailouts, and in the last few years on the U.S. Senate Budget Committee. I’ve read this blog on everything from the “subprime” crisis in 2007 to the foreclosure crisis in 2011 to the disastrous legislative approach to Puerto Rico last year to the Uber problems. Yves has organized a community focused on one thing, which is the misuse of financial power and how to correct it.

Puerto Rico is right now a wreck, because of a massive storm, but also because of years of neglect by a set of intertwined political and financial institutions. These institutions are full of people with bad ideas about how to organize the world, but more than that, they are simply not good at anything useful. If you want to rebuild a cell phone or electrical infrastructure, a hedge fund manager in New York can’t help you. All he can do is say no. It’s the same as the foreclosure crisis. Believe it or not, banks once were willing and able to work with homeowners. But now all they could do is say no.

This stuff needs to be corrected by democracy. By elected officials, by outspoken citizens, by communities like this one, willing to put forward confidently the idea that we can manage finance, that we can self-govern. Yves Smith has made it clear that the bankers, that the Silicon Valley titans, that the private equity types, are more than anything else, fools. Just a little heat on, say, CalPERS, can lead to changes in capital allocation. Just a little exposure of Uber losing a ton of money can restructure our policies towards Silicon Valley. And a little bit of democracy? Well that’s coming, after we get through the dreck of the Trump era and decide as a people that we want our liberty.

Yves, and this community, are the beacons in the dark. And oh it has been dark. But I can see that it is beginning to get a little bit lighter. The people have realized something is very very wrong. They aren’t yet clear on what they want. But they haven’t seen democracy, real democracy, in forty years. And I think they’ll like it.

So whatever you can afford, help keep this community going. We are going to rebuild our democracy, and we’re going to need this island of sanity as a place to get credible information, and the confidence, that comes with it. Go now to the Tip Jar and help out.

Yves is an optimist. It’s why she’s here. It’s why she writes. It’s why she organizes. It’s why we’re all here. Because at some level, we believe. I know I do.

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  1. Lambert Strether

    > Yves, and this community, are the beacons in the dark. And oh it has been dark. But I can see that it is beginning to get a little bit lighter

    I agree wholeheartedly with Stoller here. Despite all the noise and yammering and the tweeting and the hysteria and the massive corruption, wholesale and retail — and despite my defense mechanisms of light irony and dark humor — I have never been more optimistic about fundamentals. Whoever would have thought in 2012, say, that Medicare for All and tuition-free college would be on the national agenda? Body politics in motion tend to stay in motion, and I think our body politic is moving in a direction I can accept — though not entirely without friction! And Naked Capitalism is part of this. As ever, the Tip Jar is tastefully positioned in the sidebar to your right.

    1. johnnygl

      Lambert makes points about the change in the narrative on the democratic side. However, who’d have thought in 2012 that the consensus around ‘feee trade’ would be completely undone by the REPUBLICAN base? That base also buried the consensus on open borders, too (arguably for all the wrong reasons, but still). Also note that the repub base dragged their elites kicking and screaming the whole way.

      I share the optimism, also. Ian welsh is on record as turning optimistic, too. This is why i hit the tip jar this past week. Ideas matter. Naked cap tells us when ideas have failed and gives us better ones.

    2. Science Officer Smirnoff

      The idea that that Object in the Oval Office MIGHT pull the trigger—coming and going and coming again—is not light or hearty.

      Strategic uncertainty (as practiced by Chump) is not plausible either.

      [Of course, NC is tasty and delicious]

  2. Tony Wikrent

    And for those pessimists out there (or if you’re having a bad day, and am thinking pessimistically rather than optimistically), remember the dictum of Milton Friedman: in a crisis, people will seize upon whatever ideas are lying around. So the thing to grasp, as Stoller writes, is that our ruling institutions “are full of people with bad ideas about how to organize the world, but more than that, they are simply not good at anything useful.” Their ideas have been tried, and have failed. Unleashing selfishness and allowing everyone to follow their own self interest does NOT result in the creation of the greatest good for the greatest number. There must be a return to the classical republican ideals of the general welfare. So, what we are engaged in, is above all, a war of ideas. And if we want to win, we have to make sure that it is our ideas which are lying around when we and our fellow citizens arrive at the next decision points in these unfolding crises. Naked Capitalism is a premier venue for counter-establishment ideas.

    1. nonclassical

      ….thank you Naomi Klein…”Shock Doctrine-Rise of Disaster Capitalism”…as today, those “crises” are intentional…

  3. michael schofield

    Hi folks. I’m new here. I’ve trained myself via Cullen Roche at Pragmatic Capitalism. I consider myself slightly right of center, although at present find myself siding up with progressives, b/c the world really is that nuts.
    Am I a fit here? Does it matter?

    1. Quanka

      Doesn’t matter and yes you fit. I recall a Harper’s article from 2-3 years ago, it was one of their features where they host a discussion and the article is the transcript of a few people talking. The topic was Palestine. Most of the speakers were forgettable, but the one speaker I found particularly unlikeable had the most relevant comment of all, I am paraphrasing:

      “What makes American so great is the vast diversity of opinion — we all disagree on so many things, but we become stronger as result of the debate”

      I fear our society has mostly lost those concepts, but NC keeps my mind open and maintains one of the most open minded and open-transparent forums out there.

    2. flora

      For me, an honest/accurate and well argued right-of-center point of view is more interesting and more useful than a left-of-center echo chamber. I look forward to your comments.

    3. Zzzz Andrew

      Yes, check it out for a while, and definitely stay for the comments. I’ve seen several “bizarrely, my conservative uncle and I found ourselves in 100% agreement” comments over the last few months, and I think this isn’t a coincidence — where there’s a sincere focus on policy and law and justice, fair-minded people of all stripes are going to have a chance to find common ground. Not to mention a lot of information. Give it a shot.

  4. David

    I’ve always been impressed by Gramsci’s idea of the War of Position – crudely, providing a competing discourse to the dominant discourse of power, and so giving people concepts and a vocabulary through which to seek change. As long as change is literally unthinkable (incapable of being conceptualized) it won’t happen. Even the gravest crises of the system, such as happened a decade ago, can be assimilated to the existing model (“mistakes were made…”) so long as there is no competing model. What this site helps to do is to develop and popularize an alternative discourse, so that instead of being stuck in glum incomprehension, people can say “yes, but ….” Given the nature of NC’s readership, and the quality of its comments, I believe it is actually helping to educate and influence people who are themselves in positions to influence others. This is a slow process, but it’s the only way it will happen. In Gramsci’s time, it was possible to imagine an organised working class wth its own organisations and leadership adopting this new discourse. Today, that’s hard to see in most countries. But there are plenty of people – economists, financiers, journalists, all-purpose intellectuals – who would understand and accept this discourse if they come across it, not least because many of them are aware that they themselves are threatened by the current system. Then you will start to see change.
    Which can’t come soon enough, as far as I am concerned. As someone who studied economics in the 1960s – though not to an advanced level I admit – I’ve been in a state of numbed disbelief with the return from the dead over the last generation of ideas which were dismissed in a jocular footnote in those days, but now have power and dominance. I had begun to wonder whether I was the only sane person in the world until I discovered this site a decade ago, and have read it ever since. With luck, the current fundraising round (to which many of us have happily contributed) will enable the good work to continue and expand.

    1. Disturbed Voter

      That is why “control of the narrative” is so important to the status quo authorities. It is better for them that change is unthinkable. Or that the designated candidates “are the only alternatives”.

      Optimism? Sure, just don’t out your head in the sand.

      1. nonclassical

        …’murkan history defines, change occurs when all lose all…which is largely reason bank$ters were bailed…

    2. Ashburn

      Having a competing discourse and a competitive model at the ready are essential. Milton Friedman’s comment on the success of the neoliberal project: “Only a crisis — actual or perceived — produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.” Fortunately, Naked Capitalism provides the Left that necessary discourse and the elements of a competitive model.

      1. nonclassical

        …thanks to Naomi Klein “Shock Doctrine-Rise of Disaster Capitalism” for historical documentation of Friedman-“Chicago Boys” “crises”….which are entirely intended at this point (and as Malcolm intoned, “come home to roost”)…as defined irrevocably, here:

  5. Wisdom Seeker

    “And a little bit of democracy? Well that’s coming, after we get through the dreck of the Trump era”

    I am tending to think that the election of Trump, against the Establishments of both parties, was actually the first birth pains of that new bit of Democracy you’re hoping for. The subsequent rejection of establishment republican candidates at by-elections supports this notion.

    Unfortunately perhaps, it wasn’t the “Democratic” party experiencing Democracy, thanks to the shenanigans against the dear Senator from Vermont. Although it appears that enough of the corruption was exposed for there to be some hope for the “Democratic” party on the next go-round.

    It looks like the middle class has lost its faith in the party elites on both sides. The ads, the money, and the old wedge issues have stopped working. With Weinstein going down, one even has hope that the elite-crime-with-impunity party might be ending as well. In that environment, the party which reorganizes most rapidly to recapture those middle class votes with fresh ideas is going to clean up in the next few elections.

    Trump isn’t so much a disease as a symptom of middle class rage and the thirst for fresh policy ideas to finally address the very real problems facing the nation. And yes, sites like Naked Capitalism are crucibles for the new ideas that will be needed.

  6. JBird

    >>>I’ve been in a state of numbed disbelief with the return from the dead over the last generation of ideas which were dismissed in a jocular footnote in those days, but now have power and dominance. I had begun to wonder whether I was the only sane person in the world until I discovered this site a decade ago, and have read it ever since. <<<

    It has been a project by some individuals and families since the New Deal, to unravel not only the FDR's reforms, but to get rid off most of the reforms of the previous Progressive Era. The ideas that we are now fighting were seeded via think tanks and foundations since then, and have been acquiring increasing influence, and now outright control, especially since the mid 1970s. That is why those footnotes became book covers.

    Some really do believe a libertarian banana republic is better than a democratic country with a broadly equal, and wealthy, nation. Worse, the most extreme do not even seem to believe in the rule of law. It not even a fight between liberal and conservative, left and right. This evil, and I use that word deliberately, mono-culture of ideas has been at least 80 years in becoming. And why is feels so overwhelming.

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