The simmering economic crisis does not, of course, leave the rulers unburdened. But they can call upon state power to come to the rescue. When Continental Illinois Bank and Trust faced collapse in 1984, the government was expected to respond, and did, with "the largest nationalization in American history" (Howard Wachtel). The director who presided over the financial disaster, Roger Anderson, was punished by appointment to the Federal Advisory Council, where he became an official adviser to director Paul Volker of the Federal Reserve, which had refused to use its disciplinary and control authority as it observed the growing crisis. If the collapse of the Olympia and York real estate empire indeed causes the $3 billion of losses that the banks initially feared, taxpayers will again be called upon to render the proper services. Austerity may be the right remedy for Latin American peasants, Polish workers, and the forgotten people of South-Central Los Angeles; but not for the people who count.⁴⁸

The government also has the duty of raising protectionist barriers when needed: for example, to allow the US steel industry, which arose in the first place behind protectionist walls, to recapitalize by effectively restricting steel imports to 20 percent of the market since 1982. At the same time, it has the parallel responsibility of undermining unions, so that new "low-cost, non-union producers" can pay their labor force between one-half and one-third of what steel workers had gained after a century of bloody struggle, and thus become "exemplars of the lean and mean" in the admiring words of the London Economist, echoed by the New York Times, which also lauds the success of the "decade of protection from imported steel" and the resort to "nonunion work forces" for lowering costs.⁴⁹

One important achievement of the new imperial age is that it further marginalizes the general population, clearing the way to uplifting rhetoric about our democratic ideals without fear that the wrong people might take it seriously. The global rulers can now operate with fewer constraints, more coordination and central management, and less interference from the rabble, who not only have no influence over the decisions of the rulers (the basic principle of capitalist autocracy), but also lack any awareness of them. Who follows the crucial decisions of the GATT negotiators or the IMF, with their enormous impact on global society? Or of the TNCs and international banks and investment firms that dominate production, commerce, and the conditions of life worldwide? The North American Free Trade Agreement (NAFTA) will have large-scale consequences (a bonanza for investors, very likely a disaster for workers and the environment). Its contents are unknown. The text was withheld even from the Labor Advisory Committee, which is required by law to review such measures, until one day before its report was due. Congress abdicated responsibility. Citizens know nothing.⁵⁰

For the past several hundred years, elite democratic theory has tended to range within a narrow spectrum. At one extreme, we have the libertarian thinker John Locke, who held that citizens have no right to discuss public affairs, though they may know about them; the modern variant is a bit more forthcoming (see p.18). At the other extreme we have statist reactionaries of the Reaganite variety ("conservatives"), who reject the right of the public even to know what their leaders are doing and therefore establish illegal state propaganda agencies, favor large-scale clandestine operations, block release of information about the government even from the distant past, and in other ways protect state power from scrutiny. Reagan-era censorship reached unprecedented heights, including suppression of the documentary record so extreme that the chairman of the academic advisory board for the State Department resigned in protest. The new imperial age marks a further move towards the authoritarian extreme of formal democratic practice.⁵¹

The public is not unaware of what is happening, though with the success of the policies of isolation and breakdown of organizational structure, the response is erratic and self-destructive: faith in ridiculous billionaire saviors, myths of past innocence and noble leaders, religious and jingoist fanaticism, conspiracy cults, unfocused skepticism and disillusionment -- a mixture that has not had happy consequences in the past.

⁴⁸ Wachtel, Money Mandarins, 146; Greider, Secrets, 521f. FT, May 16/17, 1992.

⁴⁹ Economist, May 16; Jonathan Hicks, NYT, March 31, 1992.

⁵⁰ Preliminary Report, LAC, Sept. 16, 1992.

⁵¹ DD, ch. 12; Wilbur Edel, "Diplomatic History�State Department Style," Political Science Quarterly, 106.4 1991/2.