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How Conservatives Abandoned the Free Market and Why Liberals Should Too The Predator Sta tc James K.. Galbraith Au ihor or eiraliq 1 111010al As power ebbed from the corporation in the late 1970s and 1980s and became vested, once again, in free-acting individuals, the basis for collaboration between comparatively progressive elements within business and a broadly progressive state tended to disappear. Instead, business leadership saw the possibility of something far more satisfactory from their point of view: complete control of the apparatus of the state. In particular, reactionary business leadership, in those sectors most affected by public regulation, saw this possibility and directed their lobbiesthe K Street corridortoward this goal. The Republican Party, notably in the House of Representatives under Newt Gingrich and later Tom DeLay, became the instrument of this form of corporate control. The administration, following the installation of George W. Bush, became little more than an alliance of representatives from the regulated sectorsmining, oil, media, pharmaceuticals, corporate agricultureseeking to bring the regulatory system entirely to heel. And to this group was added another, overlapping to some degree, of equal importance: those who saw the economic activities of the government not in ideological terms but merely as opportunities for private profit on a continental scale. Jack Abramoff became, for a moment, the emblem of this class. This is the Predator State. It is a coalition of relentless opponents of the regulatory framework on which public purpose THE PROGRAM WAS DONE IN SUCH A WAY AS TO MAKE PAYMENTS TO DRUG COMPANIES AS LARGE AS POSSIBLE. depends, with enterprises whose major lines of business cornpete with or encroach on the principal public functions of the enduring New Deal. It is a coalition, in other words, that seeks to control the state partly in order to prevent the assertion of public purpose and partly to poach on the lines of activity that past public purpose has established. They are firms that have no intrinsic loyalty to any country. They operate as a rule on a transnational basis, and naturally come to view the goals and objectives of each society in which they work as just another set of business conditions, more or less inimical to the free pursuit of profit. They assuredly do not adopt any of society’s goals as their own, and that includes the goals that may be decided on, from time to time, by their country of origin, the United States. As an ideological matter, it is fair to say that the very concept of public purpose is alien to, and denied by, the leaders and the operatives of this coalition. The Predator State is different from the New Industrial State, and yet it grows directly from the decline of the economic system my father, John Kenneth Galbraith, described in 1967. An economics of organizations and not of markets remains the only useful and pertinent way to describe it. Whereas in the New Industrial State the organization existed principally to master advanced technologies and complex manufacturing processes, in the Predator State the organization exists principally to master the state structure itself. None of these enterprises has an interest in diminishing the size of the state, and this is what separates them from the principled conservatives. For without the state and its economic interventions, they would not themselves exist and could not enjoy the market power that they have come to wield. Their reason for being, rather, is to make money off the stateso long as they control it. And this requires the marriage of an economic and a political organization, which is what, in every single case, we actually observe. The major battlegrounds of American domestic politics today emerge clearly once there is an understanding of the Predator State. They do not consist in the bipolar argument toward which so much thought and argument is directedthat of “government” versus “the market” They do not for the most part consist in a perpetual war, as many are led by their training in economics to suppose, over whether the frontiers of the state should expand or contract. Rather, they assume that over time, the role of the state will gradually grow. At some deep level, everyone with a serious role in the policy debates agrees on this. The politics consists in a continuing battle over who SEPTEMBER 5, 2008 THE TEXAS OBSERVER 19