The movement toward corporatism began in the years following the re-stabilizing of the political order in the United States, but did not begin to make an impact on society until the 1980s. In the interim period between the end of Nixon and election of Ronald Reagan, American capitalism reorganized itself and prepared for the next phase of its development.

The social roots of corporatism have their origin in the formation of the Second American Republic. The unwillingness of victorious Northern capitalism to decisively crush their dispossessed Southern brethren, and later compromise with them in 1877 (which brought Reconstruction to an end), allowed for the continued existence of a faction within the capitalist class that not only rejected the social progress contained in the Second American Revolution, but even rejected many of the socially-progressive aspects of the First American Revolution and the European Enlightenment.

Politically, these elements formed the basis for the “Dixiecrats” — the faction of Southern capitalists supporting the Democratic Party — in the decades following the end of Reconstruction. They were not only the basis for one-party rule in the southern states throughout the late-19th and early-20th centuries, but also funded and supported social-conservative movements like the revived Ku Klux Klan (and similar organizations), Confederate veterans’ organizations and pro-segregation political groups.

Until the 1930s, the Dixiecrats held powerful sway in the Democratic Party, balanced only by the populists around William Jennings Bryant and a growing liberal current emerging in New York and New England. The election of Franklin D. Roosevelt in 1932, and his coalition with the “new” petty bourgeoisie, altered the balance of forces and began a conflict that, ultimately, would lead to the Dixiecrats exodus from the Democratic Party in the 1950s and 1960s. Initially, Roosevelt sought to compromise with these elements, but after a while declared war on what he called the “Copperheads” in the Democratic Party (a reference to pro-Confederate, pro-slavery Democrats during the Civil War) — i.e., the Dixiecrats.

The rise of the Civil Rights movement, and the Democratic Party’s support for its pacifist wing around Martin Luther King Jr., sparked the defection of Southern Democratic officials from the party, and the withdrawal of support from Southern capitalists. Initially, many of these elements banded together in the States Rights Party. However, in 1968, as the political arrangement of American capitalism teetered on the brink, Northern and Southern capitalists worked out a deal to re-establish unity within their own ranks.

The outward expression of this agreement is known as the “Southern Strategy.” Brokered by conservative elements in the Republican Party, this arrangement would restore much of the prominence the Dixiecrat capitalists had in the Democratic Party (and, by extension, the American capitalist political system) in exchange for throwing its support behind the Republicans as the party of capitalism. In exchange for their support, Southern capitalists also demanded a decisive end to the institutions created during the “liberal-democratic” phase of American capitalism, centrally those created under the New Deal.

The reunification of the hitherto warring factions of American capitalism aided the re-stabilizing of the political system after the sacrifice of Nixon to “public opinion.” A consensus was reached within the capitalist class on necessary tasks: re-establishment of the coalition with a majority of the petty bourgeoisie; a deepening of the divisions between layers of the working class, designed to draw the most privileged layers closer politically to the petty bourgeois “middle class;” a breaking of the collective power of the working class and its organizations, primarily the labor unions; and, a dismantling of not only the institutions, but also the culture, created by the New Deal of the 1930s and Great Society of the 1960s to “break the spirit” of the American working class and insure “class peace.” The capitalists now turned to their political parties, the Republicans and Democrats, and secured their obedience.

The reorganization of American capitalism came just in time. After a year of relative quiet in 1976, workers across the country again rose up and went on strike. Municipal workers, brewery workers, miners, newspaper workers and truck drivers all went on strike during the second half of the 1970s. Democrat Jimmy Carter, elected as a “liberal” to succeed Ford in 1976, initially failed in his attempts to bring the weight of the capitalist state down on striking workers. In 1977, Carter tried to use the Taft-Hartley Act against striking coal miners; workers burned the back-to-work order to keep warm on the picket line.

The following year, the capitalists fired the first volley in what was to become an all-sided assault on the working class that continues to this day. “Shock therapy” was introduced and economic austerity measures implemented. The Federal Reserve raised interest rates to 20 percent, forcing an end to domestic industrialization and the beginning of a wave of capital flight from the Midwest to the South and overseas. In the following years, whole sections of the industrial base of the United States were packed up sent to Mexico or China, or closed down in favor of increasing imports from Japan. This was designed to break the power of the organized working class, especially in auto, steel and the growing electronics industry.

In industrial cities large and small, mass unemployment pushed millions into poverty and devastated whole communities. Some workers moved with their jobs to the southern and western states. Others turned to social welfare programs run by the state. But most workers tried to survive by taking jobs in the growing transportation and service sectors, moving from the point of production to the point of distribution. These jobs were often at lower pay with few of the benefits they once enjoyed.

The initial round of attacks initiated by Carter weakened the organized labor movement enough to begin the second phase of attacks, under the new president, Ronald Reagan. A little over six months after taking office, Reagan fired over 80 percent of the more than 13,000 members of the Professional Air Traffic Controllers Organization who took to the picket lines for better pay, better working conditions and a shorter workweek.

The breaking of the PATCO strike was a watershed event in the American labor movement. Reagan’s tactic of firing striking workers en masse and hiring replacement scabs was to become the standard method used by the capitalist class to break the organized labor movement. The names of the strikes broken in the 16 years following the defeat of the PATCO strike are seared into the memory of the working class: Phelps-Dodge, Hormel P-9, Chicago Tribune, TWA, U.S. Steel, International Paper, Greyhound, New York Daily News, Pittston Coal, A.E. Staley, Caterpillar, Detroit Newspapers.

But the assault begun under Reagan was not confined to the unions. The entire capitalist state mobilized against the working class, attacking the social welfare system established under the New Deal and Great Society, and programs aimed at mitigating the effects of social inequality.

Welfare programs were de-funded, and recipients were attacked as being “lazy” or, in the case of African American women, “welfare queens.” The homeless, many of them veterans of previous imperialist wars, were hunted down, and swept off the streets and out of abandoned buildings. Affirmative actions programs were characterized as promoting “unqualified” applicants. The progressive tax structure was furthered rolled back and the practice of handing out tax breaks, subsidies and incentives to the wealthiest Americans (what we now know as “corporate welfare”) was institutionalized.

The breakdown and collapse of the old coalition between the capitalists and petty bourgeoisie was not the end of the alliance. Out of the ashes of the old came a new agreement between the exploiting and oppressing classes, prompted by the rise of a new generation of the petty bourgeoisie. This new generation, the same generation that two decades before began the social and antiwar movements of the 1960s, had more than made their peace with capitalism; they embraced it wholeheartedly.

The transition from “hippie” to “yuppie” by these elements of the petty bourgeoisie laid the basis for the defeat of the workers’ movement in the 1980s and early 1990s. These elements had succeeded in eroding and destroying the then-existing capacity of the working class to organize and lead itself in the decades before, and as a result compelled many working-class organizations to turn to them for survival, thus sacrificing their (albeit tenuous) class character in the process. They did this not only among the self-described socialist and communist organizations, but also among the organized labor movement.

Unlike those of previous generations, the officials in leadership of most labor unions in this period were far removed from the shopfloor and struggles that organized and strengthened the movement through the 1970s. The lack of a class anchor, combined with the atmosphere of “partnership” fostered by the capitalists in the previous period, drew these labor officials closer to the very people they were supposed to struggle against on behalf of their members. The result was the beginning of a wholesale process that transformed the hitherto reactionary labor unions (i.e., workers’ organizations with a reactionary and class-collaborationist leadership) into another layer of management and police on the shopfloor.

These officials openly rejected strikes and labor actions common in the past as “outdated,” relying instead on boycotts and impotent “campaigns” appealing to the “good will” of the capitalist class, while also working with the exploiters and oppressors to impose wage cuts and erosion of working conditions, and police a union’s own members. The slide into company unionism continues to this day.

The rebirth of craft unionism, as seen among aircraft mechanics and professional employees, is a consequence of this development of the industrially-organized unions into organizations that seek to manage workers. At the same time, however, the implosion of the reactionary labor movement also cleared the way for more radical and class-struggle oriented unions, like the United Electrical workers and Industrial Workers of the World, to gain new members and have a new breath of life, though the fruits of their effort were slow coming.

It was also during this period that the capitalist state sought direct intervention into the internal affairs of the organized labor movement. The example of the International Brotherhood of Teamsters is the most well-known and illustrative example. Since its founding in 1903, and especially since its successes at organizing transport workers across the country in the 1930s and 1940s, the Teamsters union was a special target of the capitalist class. The connections that existed between union officials and crime organizations were used as an avenue of attack against the Teamsters, especially in the years after the Second World War.

The capitalists looked for a way to break their competitors in “organized crime” while also breaking the power of the union. They found willing pawns in the collection of opposition caucuses that came together as the Teamsters for a Democratic Union. In 1989, the leaders of the TDU, most of them aspiring or dispossessed officials and bureaucrats, signed a court “consent decree” with the U.S. Department of Justice, effectively allowing the capitalists to decide who would and would not be members and leaders of the union, in the form of a government-appointed “Independent Review Board.”

In 1997, the Teamsters broke the 16-year series of defeats for the labor movement by successfully striking against United Parcel Service. Ron Carey, the then-President of the Teamsters and the first to be elected under terms of the “consent decree,” was unlike most union officials of the time and had worked at UPS since 1956. The two-week battle was able to win mass support and even compel the AFL-CIO to financially support the union. The exploiting and oppressing classes felt betrayed by their perceived “labor lieutenant” and his unwillingness to concede most of the modest demands the workers made.

Less than three months after this victory, Carey was removed from his position in the union and banned for life from being a member. Publicly, the reason given was alleged ties to a kickback scheme related to his re-election effort. However, even after Carey was cleared of all charges in 2001 (and even though a report by the government overseers in 1997 said no evidence existed of Carey knowing about the scheme), he remained banned from the Teamsters until his death in 2008.

His expulsion was meant as a message to any other labor union officials that might dare to challenge capitalism’s dictates. Since 1997, nearly every strike has been derailed by labor union officials; those unions that waged modestly successful strikes, or held to a stalemate in the face of demands or large concessions, saw their leaders purged from the organizations, either by the government or by the higher levels of the union officialdom.

A key obstacle to the establishment and consolidation of corporatism was the continued existence of the Soviet Union, and particularly its overtones toward “peaceful co-existence” (détente) in the 1970s.

The first phase of the Cold War against the “socialist bloc” died in the forests and fields of Vietnam, with the United States forced to withdraw from the country in 1972 after 11 years of conflict. However, the future existence of American capitalism increasingly relied on absorbing new areas of resources (including cheap labor) into its sphere.

With the rise of the European Economic Community in the 1960s, later to become the European Union, American capitalism now had major economic rivals in the world and needed to solidify its share of the world’s labor and natural resources for itself. The successes of the Soviet Union in establishing economic and political relations with countries in Africa and Latin America undermined this competition among the capitalists to begin re-dividing the world. They had to be stopped, contained and rolled back, if not destroyed, in the immediate term or else capitalism would fall into a deeper crisis.

Moscow’s sending of soldiers to Afghanistan in 1979 to support the democratic revolution in that country was used by American capitalism as a basis for launching the second phase of the Cold War. The Sandinista democratic revolution in Nicaragua that same year allowed for the United States to wage a two-front “war,” especially using the prospect of “Communism” in Latin America to whip up patriotic fervor.

But the capitalists would not directly intervene against either the Sandinistas or the pro-Soviet Afghan government. Instead, they would begin the use of proxy armies to wage the battles, supplying and equipping them directly or covertly. The capitalists now gambled that the Soviet government would not be able to sustain both their own military adventure and those of friendly countries, and used any attempts by the USSR to withdraw support to accuse them of weakness or “betraying” those who supported them.

As well, the United States, along with its capitalist allies in Europe (who had their own motivations), began looking for ways to undermine the “socialist bloc” from the inside. In 1953, 1956 and 1968, when the Soviet Union put down uprisings and mass dissident movements militarily, the capitalists were only able to exploit these events marginally, supporting and winning over only small currents or individuals.

The rise of the Solidarność (Solidarity) labor union in Poland in 1980 offered the capitalists a slim but golden opportunity. Most of the workers who were members of Solidarność wanted less oppressive and more democratic “socialism,” but its leaders, mostly devout Catholics, were susceptible to being bought off by the capitalists. The U.S. government, using the Catholic Church as an intermediary, met with and soon after bought off the Solidarność leaders.

The propaganda value of a “labor union” rising up against “Communists” was priceless. Moreover, having in place a “union” leadership able to manage an historically insurgent working class meant that, when the time came to overthrow the Polish regime and implement economic “reforms” favorable to American capitalism, the workers would not have the organization to organize and fight back. Efforts to form similar ties with dissident movements that could be used as a “democratic” foil against “totalitarian Communism” were sought and found throughout the “people’s democracies” and in the Soviet Union itself.

The gamble paid off. The Soviet Union, the engine of the “socialist bloc,” which had been stagnating economically since the early 1970s, now began to completely break down. By the mid-1980s, a new generation of leadership took over that again sought “peaceful co-existence” with American capitalism, but on capitalism’s terms. However, capitalism’s terms were singular: dissolution, and end to “really existing socialism” and break-up of the “socialist bloc.” Capitalism steadily increased its pressure, using the “democratic” foil effectively to undermine the control of the “official Communist” parties in power.

Now the “dominoes” began to fall the other way. In 1987, Poland’s “Communists” relinquished power to a pro-capitalist political movement sponsored by Solidarność. Two years later, the remaining “people’s democracies” experienced “revolutions” and uprisings that pushed out the “official Communists” and saw pro-capitalist (and explicitly pro-American) regimes take power (except East Germany, which was absorbed by the west into a unified capitalist Germany).

The Soviet officials and leaders made a half-hearted last-ditch attempt to preserve their “socialism” in August 1991, but by then the schism in its ruling circles had led a strong section of it into the waiting arms of American capitalism. The pro-American politicians and revived capitalist class oversaw the defeat of the Soviet officials and the break-up, at the end of 1991, of the Soviet Union itself.

As with the case of the American capitalist class completing its re-organization and stabilization just in time to begin its assault on the working class in 1978, so it was that they were able to neutralize the power of the Soviet Union in time for opening a new series of conflicts for the re-division of the world. Moscow’s unwillingness to support its long-time ally, Iraq, in the 1991 Gulf War was the signal that the time had come to begin the long march toward a forcible re-division imposed by Washington on its rivals.

However, the defeat and destruction of the Soviet Union had an unexpected consequence. The opening of nearly one-fourth of the earth’s surface to exploitation by the world’s capitalist Great Powers — the victory of “democratic” capitalism in the Cold War — brought the slide into corporatism to a halt. Its march had already slowed to a certain degree by the wider opening of China to international capitalist investment in 1989, following its violent suppression of the workers’ revolt that sprang up alongside student-led protests in Beijing’s Tiananmen Square; the cession of the territory of Eastern Europe and the former Soviet Union offered a bonanza to American capitalism they could not resist.

In effect, the “official Communists,” in their act of capitulation and defection, rendered one final service to the world’s working class, even though it meant the immiseration of the workers in those countries. By offering world capitalism a new period of accumulation and division, they held off the alternative of a forcible re-division of world imposed through a new World War for more than a decade, and accelerated the development of a revolutionizing in the means and methods of production, in the form of the Technological (or Internet) Revolution, which had begun in the 1970s.

The 1990s saw American capitalism solidifying its world position, acquiring new pools of resources and labor-power, implementing a worldwide system of production, management and distribution, and carving out a new cartel of capitalist allies, with Britain as its senior partner, and Canada and Australia as junior partners in this Anglo-American Axis. Its main rivals in Europe solidified themselves as the European Union.

In the first half of the 1990s, the Anglo-American and European cartels competed against each other to carve out spheres of influence in the former Soviet Union and “people’s democracies.” The Balkans, particularly the area hitherto known as Yugoslavia, became a patchwork quilt of rivalry and influence, with each cartel undermining the efforts of the other to establish large areas of stability. The states of the former Soviet Union were all initially firmly in the American cartel. However, as American support for anti-Russian governments in the “peripheral” countries grew, Moscow increasingly turned to Europe.

In this period, American capitalism also sought to use international “free trade” structures to undermine its European rivals and solidify its own cartel. The Free Trade Agreement with Canada, signed in 1988, was followed up by the North American Free Trade Agreement in 1994. Similar “free trade” deals were signed by Washington with client states in following years. The European Great Powers sought to mitigate the effects of these deals (and get a slice of the pie for themselves) through a reorganized worldwide free-trade system, the World Trade Organization, to succeed the General Agreement on Tariffs and Trade, which began breaking down after the Bretton Woods agreement collapsed.

The rise of “globalization” in the 1990s, founded on the ashes of the collapsed “socialist bloc,” fueled by the “free trade” rape of the countries of Asia, Africa and Latin America, and spurred on by the Technological Revolution, led to an unprecedented expansion of the American capitalist economy, maintained through excessive consumption of commodities encouraged by the capitalist class.

At the same time, the capital flight and destruction of the industrial base begun in the 1980s accelerated, fostering anger and frustration not only among workers but also among sections of the petty bourgeois managers, small businesspeople and professionals who relied on domestic economies for their survival — who saw their positions “outsourced” to similar elements in countries where the capitalists would pay, and the petty bourgeoisie would expect or demand, less.

These elements banded together to stage mass protests against the existing capitalist arrangement. The international anti-globalization movement was born. Inspired by protests and uprisings in “developing countries,” most notably the Zapatista guerrilla movement in Mexico, the anti-globalization movement posed a growing threat to capitalist stability. The mass protests in Seattle, Washington, in November 1999 were seen by the American capitalists as a sign that the only way to secure future stability was to cause a rupture with past agreements and traditions (a view later seen as confirmed by similar mass protests in Genoa, Italy, in March 2001).

The anti-globalization movement, because of its petty-bourgeois roots, was able to utilize both the nominal democratic rights enshrined in the laws of the capitalist Great Powers and the numerous cultural outlets afforded to them by their position in the relations of the capitalist mode of production. Moreover, as was the case in the 1960s, these protests were prodding workers into greater activity and, in some instances, in the direction of more radical and revolutionary alternatives to the existing capitalist order.

This growing opposition and challenge to the existing capitalist arrangement (as well as to the contemporary coalition between the capitalists and petty bourgeoisie) had to be stopped or, at least, diverted. A new and greater enemy than “globalization” had to be given to these elements — an enemy that would rally these elements behind American capitalism or at least neutralize their organizing capacity. In turn, the traditions and avenues these opposition elements used (or could use) had to be forever closed off.

Beginning in 1995, American capitalism accelerated its push toward transforming from a nominal democracy to a corporatist system. In the space of only five years the capitalist Great Powers had managed to carve up the resources, labor and markets opened after the collapse of the “socialist bloc.” Only a few scant regions remained that were unsettled or undeclared. The capitalists recognized that, once again, it was only a matter of time before the existing division of the world’s spoils would have to be re-divided.

Since the end of Bretton Woods, the hegemonic dominance of American capitalism had steadily weakened. The massive outflow of dollars and capital continued after the collapse of the agreement, making the U.S. more dependent on the worldwide credit system for its continued expansion. The capital flight of the 1970s and 1980s meant an increased dependence on imported commodities. The combination meant the transformation of the U.S. from the world’s largest creditor into the world’s largest debtor.

The opening of the former Soviet Union, “people’s democracies” and China to international capitalist exploitation allowed for some expansion and renewal. But the accumulated wealth acquired was consumed relatively quickly by the Great Powers. As capital and resources were consumed, speculation grew exponentially. Economic “bubbles” would form, grow, become unstable and collapse.

By the mid-1990s, whole countries saw their economies become “bubbles.” Speculators now began to shuttle fictitious capital from “bubble” to “bubble,” reaping short-term gains from each move. This speculative profit-taking was akin to a bank run on an economy-wide scale. In 1997, the Russian and southeast Asian economies collapsed as a result of their economic “bubbles” bursting. However, the speculators had a new arena and “bubble” in which to operate: the United States economy.

Early on, the American “bubble” was seen as a way to bolster the world position of Washington and Wall Street. Capital inflow because of attractive interest rates fueled a boom in jobs, housing and technological development. The information-technology and service sectors absorbed millions of unemployed workers as the Internet-related “bubble” expanded daily.

As the year 2000 dawned, the economic expansion that lasted through most of the decade began to stagnate. Attempts to stretch available credit became a “bubble” in and of itself; debt became a basis for credit, fueled by cheap commercial and residential mortgages. As the inflow of capital slowed, more debts were repackaged and sold by speculators to extend credit, which in turn was used to intensify consumption of overproduced commodities by maintaining unemployment levels relatively low.

But without a large enough industrial and manufacturing base, it was not possible for the growth to be anything more than a “bubble.” The high interest rates that attracted speculators and foreign capital were poison to capitalists who dealt primarily in the domestic economy. Capital flight by American capitalists, as well as takeovers and mergers with overseas capitalists, made the growth of the economy little more than a revolving door for capital accumulation. If the world capitalist order continued in its existing form, the United States would quickly lose its economic position, which would mean domination by its rivals.

In 1994, the capitalists revealed the sharp division within its ranks. The corporatists openly challenged the rest of their class and succeeded in taking control of both houses of Congress. Led by Newt Gingrich in the House of Representatives, the corporatists began a period of open intra-class and inter-class conflict with the established coalition of capitalists and petty bourgeoisie.

Within three years, the corporatists had managed to build their own coalition with a section of petty bourgeois managers and professionals; the revived consensus of post-Nixon American capitalism gave way to bitter communal warfare among the exploiters and oppressors.

The following year, in 1998, a relatively minor sexual peccadillo by then-President Bill Clinton was used by the corporatists to effectively destabilize not only the long-standing ruling class coalition, but the entire constitutional underpinnings of the republic. Through the use of the impeachment process, the corporatists sought to overthrow the twice-elected chief executive and, in the process, undermine the political standing of their political opponents. Though they did not succeed in removing Clinton, the corporatists did succeed in destabilizing the “democratic” faction of the exploiting and oppressing class.

However, that instability proved to accomplish little more than bring the two sides to a stalemate. The next year, in the context of the upcoming presidential election, each side would use the process to secure their power. The “democratic” coalition chose the sitting vice-president, Al Gore, as their candidate for chief executive; they also made a concession to wavering elements in between the two factions — the “center” — by selecting corporatist Democratic Senator Joe Lieberman as his running mate.

The corporatist faction chose George W. Bush, then-governor of Texas, as their chief candidate. His political malleability, lack of principles and “populist” image (in spite of being the son of former CIA Director and President George H.W. Bush) made him attractive to those who needed someone who would only listen to the leading voices of the faction and not “public opinion.” To make sure he held the line, former Congressman and Secretary of Defense Dick Cheney, a chief architect of American corporatism and its policies, was selected as the vice-presidential candidate.

However, the political crisis and economic changes that marked the previous years, leading in part to the development of the “anti-globalization” movement, raised their own candidate, Ralph Nader. This challenge, the third such independent campaign to attract a significant section of the exploiting and oppressing classes, at once was an organic outgrowth of the “democratic” faction and a threat to its continued position of power. No such challenge was allowed to develop from among the corporatists.

The “democratic” coalition anticipated victory on Election Day 2000 — a narrow and hard-won victory, but a victory nonetheless. Scientific polling in advance bore this assessment out, and most of the capitalist media was preparing for this outcome. But the corporatists saw the same assessments, and with them the chances of taking power organically evaporating.

Before and on Election Day, the corporatists mobilized their forces to begin a campaign of systematic disenfranchisement of voters and tampering with vote totals. In several states, voters for Gore and the “democratic” coalition were kept away from the ballot box in large numbers; in some cases, the number of voters whose right to vote was infringed approached, matched or exceeded the number of voters who chose the “third party” option. But in one state, Florida, even the diminished numbers of voters for Gore were close enough to spark a recount of the ballots cast.

The state became the battlefield for open, public warfare between the corporatist and “democratic” factions. As the recount progressed and reviewed ballots began to show the narrow victory for Gore that was expected before Election Day, the corporatist faction resorted to extralegal means to suppress it.

The corporatists intimidated local governments into allowing them to stuff ballot boxes with illegal “absentee votes” allegedly submitted by soldiers serving overseas, and used their observers and lawyers to frustrate the mandated manual recounts in other localities. When these tactics did not work in Miami-Dade County, the corporatists organized loyal members of their movement to stage a mini-putsch in order to reinforce their intimidation, and succeeded in shutting the recount down.

For their part, the “democratic” faction confronted the battle divided. A section of the coalition rooted in the liberal-democratic and radical-democratic organizations of the faction began to organize voters’ rights protests in Florida and other states. These protests quickly attracted hundreds and thousands of participants, including large parts of the African American community, which was a central target for disenfranchisement, and growing sections of the working class.

However, these protests threatened to grow out of the control of the capitalist and petty-bourgeois leaders of the coalition, and the moderate and conciliatory sections of the coalition demanded they be immediately shut down. The wildfire-like growth of support for democratic rights was perceived by the capitalists as a greater threat than their corporatist opponents.

Support within the “democratic” coalition to end the legal challenges and concede power to the corporatists began to grow; Lieberman’s open break with the “democratic” coalition all but solidified this course of action. The failure of key legal challenges, culminating in the decision by the Supreme Court of the United States to stop the vote recount, made it clear that any further attempts to take what was won through the electoral process risked an explosion of mass outrage, protest and organizing. The capitalists in the “democratic” coalition conceded power to their corporatist counterparts, and saw to it that the petty-bourgeois elements who wished to continue the challenges in Congress were isolated and suppressed.

The ascension of George W. Bush in 2000 represented a bloodless, anti-democratic and unconstitutional coup d’état in the United States. The systematic disenfranchisement of voters was in direct contradiction to the XIV Amendment to the Constitution, and the failure of Congress to enforce the constitutional authority given it under this amendment, meant not simply the allowance of the coup to succeed, but represented an end to the nominal democratic system that had prevailed since the Civil War.

With the old democratic content drained from the capitalist political system, the capitalists were now free to begin the reorganization of the state and society in earnest. However, the “democratic” coalition continued to wage a rear-guard action against the corporatist regime, slowing down attempts to push through the installation of corporatist judges in the judicial branch and frustrating the passage of their legislation. Even media pressure and open threats could not completely halt these efforts. However, this was anticipated by the corporatists; they knew it would take a cataclysmic event, a “new Pearl Harbor” to cow the “democratic” elements and their supporters, and clear the way for completing the transition.

The coordinated terrorist attacks in New York and Washington, D.C., on September 11, 2001, provided that event. The spectacular and horrific images of the collapse of the World Trade Center succeeded in silencing the “democratic” coalition and the core elements of the “anti-globalization” movement. Division within the exploiting and oppressing classes gave way to consensus, and the corporatists took immediate advantage of the changing situation.

In the months following the attacks, the corporatists pushed through laws that restricted or eliminated the constitutional and democratic rights of American citizens, shifted large sections of authority over the forces of the capitalist state to the executive branch, and initiated an open-ended “war on terrorism” — “terrorism” being so vaguely defined as to encompass virtually any meaningful form of protest or opposition to the capitalists, their institutions and their armed enforcers of “law and order.”

As well, corporatism carried out a process of “perfecting” the state to match its needs. Domestic security forces and surveillance networks were reorganized and expanded. Posse Comitatus laws, meant to prevent the military from performing policing duties, were overturned or ignored. The chief executive was given the power to strip citizenship rights from Americans accused of “terrorism.” Habeas corpus, the right of people to not be held by the state indefinitely and to due process of the law, was tossed out. Military commissions run by the commander in-chief were set up to deal with those accused of “terrorism;” these courts could imprison someone indefinitely on the basis of secret evidence and anonymous accusers.

American corporatism consolidated the merger between capitalist economic and political power through the development of the corporate welfare state, which shifted the economic burden of funding and maintaining the services of the state further on to the backs of the working class while acting as a creditor and guarantor for the exploiting and oppressing classes by providing them with tax relief and subsidies, and underwriting their debts by facilitating their sale by speculators overseas in exchange for more credit.

These actions marginally improved the position of American capitalism by slowing the progress of the economic decline begun in 2000. However, the economic power of the United States remained relatively weak in relation to that of its European rivals. Since the 1970s, the disparity between American economic and military power had continued to grow, reaching a point where it began to undermine the military authority held by the United States around the world. The growth of the European Union threatened a trade war; the American capitalists needed to put its rivals in check and gain an advantage over them.

The invasion and occupation of Afghanistan in 2001 offered some marginal gains for the United States and its cartel of capitalist partners. But the relative instability of the region — not simply the situation in Afghanistan, but the unresolved conflicts between India and Pakistan, and the tenuous political situation in the latter — led to few advantages being yielded as a result of the overthrow of the Talib’an.

American capitalism now began a two-pronged approach to undermining its rivals: first, the U.S. began to destabilize the institutions of “globalization,” with the goal of putting up obstacles to their further expansion; and, second, initiated an expansion of the “war on terrorism” to seize resources and assets being eyed up by or beginning to provide advantages for the European imperialist cartel. The sabotage of the Doha Round of the WTO and invasion of Iraq were the immediate expressions of this approach.

The corporatists won a consensus on this approach within the capitalist class relatively easily, but the petty bourgeois elements of the “democratic” coalition, many of whom profited from “globalization” and, in particular, the relative success of European capitalism, staged a loyal rebellion, expressing verbal opposition to the expansion of the “war on terrorism” while supporting all requests for concrete support.

The divisions that later emerged between sections of the exploiting and oppressing classes were mainly tactical, centering on the question of management of the post-invasion occupation of Iraq. However, the division breathed new life into the remnants of the liberal-democratic and radical-democratic currents, who utilized the growing antiwar movement, chiefly organized and led by similar elements, to negotiate for a better deal from the corporatists. However, the capitalists in both factions feared the movement could threaten efforts to frustrate their rivals, and agreed to undercut any campaign that could threaten their mutually-agreed-to agenda. Concretely, this meant getting John Kerry to accept Bush remaining in power.

But even the capitalist class shifting virtually all of its support to Bush did not guarantee his position. It again took systematic disenfranchisement campaigns in Ohio and New Mexico to retain the corporatists in control of the political apparatus. Kerry’s concession to Bush the day after the 2004 election affirmed the maintenance of the corporatist consensus, and subordination of the petty-bourgeois liberal and radical democrats. However, in the coming years, while the consensus for corporatism would remain in place, the capitalists’ support for Bush and the traditional corporatist faction would begin to wane.

In the years following the installation of Bush for another four years, itself a second anti-democratic and unconstitutional coup, the consensus achieved in 2001 would begin to unravel. From the ashes of the defeated “democratic” coalition rose a new faction of the exploiting and oppressing classes, committed to corporatism but openly critical of how it was being administered and organized. The failure of the Bush regime in 2005 to provide basic aid and assistance to victims of Hurricanes Katrina and Rita, as well as the rise of an indigenous resistance to the occupation of Iraq thrust this new corporatist division to the fore.

Corporatism now had “liberal” and “conservative” factions. The origins of the “liberal” corporatists stretched back to the 1980s. In the wake of the reorganization of the capitalist/petty-bourgeois coalition under Reagan, a faction of political figures arose that exploited the base gained by the Democratic Party during the 1930s and 1960s to catapult themselves into power. These elements were often former Republicans who left the party rather than capitulate to the social backwardness promoted by the corporatists. Bill Clinton was a product of this faction, and he laid the basis for its future growth.

By 2006, the “liberal” corporatists had gained leadership of the Democratic Party and put an end to the political side of the “democratic” coalition. The remaining elements of the “democratic” faction were told they must either accept their leadership or face political oblivion. Some of these “democratic” elements saw the demand as a play for support, and gambled that, once the “conservative” corporatists were defeated, they would be able to negotiate for at least the partial implementation of their agenda.

The gamble backfired; after the Democrats won control of both houses of Congress in 2006, the leading demand of the rump “democratic” faction, impeachment proceedings against Bush and members of his regime, was taken “off the table” by the “liberal” corporatists. In the next two years, tactical adjustments would be made to the corporatist order, but its principal elements would not be touched.

The 2008 contest for control of the White House was a thoroughly corporatist “election.” Both main candidates, Barack Obama and John McCain, represented the two competing wings of corporatism and signaled the end of the first phase of transition from the nominal American “democracy” that existed since 1865 to the new forms of capitalist rule. The vestiges of the old “democratic” coalition were atomized. The strategic differences that existed in 2000 and 2004 vaporized along with the remains of “democracy.”

With the corporatist consensus secured in its political representatives, a “free election” and “seamless transition” from “liberal” to “conservative” corporatism was possible, and the “historic” transfer of power, in the person of an African American president, would allow American capitalism to rebuild its political and economic power, solidify its cartel, expand its accumulation of resources and capital, and keep “democratic” opposition cowed, timid and ineffective. A new phase of capitalist development is opened.

Working Draft adopted by the Central Committee, January 8, 2009