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When the rich and powerful overplay their hand

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We are in the grip of a socio-economic crisis in which the rich and the powerful in the United States, the United Kingdom, the Euro Zone countries and Canada refuse to share the burden of coping with the economic disaster they did so much to unleash. A few among them -- Warren Buffet and Liliane Bettencourt -- get it. The rich can overplay their hand and can end up spoiling the whole party for themselves and their wealthy confreres.

The Republicans, and not just the adherents of the Tea Party -- have elevated the refusal to countenance any increase in taxes for the super-rich -- even through the closing of tax loopholes -- to the highest level of principle.

Instead, the rich and the powerful, and those who speak for them and govern on their behalf in both parties in Washington, in London, Paris, Berlin and Ottawa, are imposing policies of austerity on their peoples, in the case of the Euro Zone, particularly on the Greeks, Spaniards, the Portuguese, and the Irish. The details of the programmes differ, but the common consequence is a sharp spike in long-term joblessness, particularly for the young and for racial minorities. Poverty, homelessness, and desperation haunt North America and Europe.

Governments, right-wing politicians and their media outlets have laboured mightily, and not without success, to divert the anger of people away from financiers and corporate bonus-recipients and onto public sector employees, union members, immigrants, and those who have pensions. It's the old, old, divide and conquer story. Without such tales, the privileged would soon be toppled from their positions of power.

Today's wealthy and their governments have forgotten the hard-learned lessons of the Great Depression. They have lashed their fates to the mast of bailouts for corporations and trickle-down economics for everyone else. They are condemning tens of millions of people to the miseries of years of economic stagnation.

What we are experiencing is no less than a revolt of the wealthy, being led by the political right. That revolt is rendering the socio-economic and political orders in many countries dysfunctional. The Tea Party is a genuine, populist, right-wing insurgency, heavily funded though it has been by billionaires such as the Koch brothers, and shamelessly promoted by the right-wing's in-house network, Fox News. Overwhelmingly, Tea Partiers are middle-class whites who fear African-Americans, Latinos, trade unionists, gays and lesbians, Charles Darwin, the usual suspects. Like the adherents of previous far right movements over the past two centuries, Tea Partiers long to return to what they imagine were the simpler times of the American past and the verities of the Fathers of the U.S. Constitution -- small government and a laissez faire economy, which hasn't existed in the form they yearn for since the 1840s.

The problem is that right-wing revolts can get out of hand and can create difficulties, even grave difficulties, for the rich and the powerful and the states that do their bidding.

The most overwhelmingly important such case was the French Revolution. The Revolution was preceded by a revolt of the rich and the powerful, known as the Revolte Nobiliare. That revolt, which sought to protect the privileges of the nobility, gravely weakened the French state. It opened the way for a transformative social revolution, a revolution that swept away the actors and institutions that had launched the Revolte Nobiliare, overturning the monarchy and the entrenched rights of the nobility in the process. What is significant for today is that a political upheaval begun by the forces of social and political reaction can end up generating an upheaval that is utterly different from the one the reactionaries had in mind.

The French state was vulnerable to the Revolte Nobiliare and later the Revolution as a result of a predicament with which we are all familiar today, government debt. The rich and the privileged refused to pay higher taxes. The French state was deeply in debt in the 1780s as a result of a long series of wars France had fought, most recently as the ally of the Patriots during the American Revolutionary War.

The showdown of the privileged with the state of Louis XVI began in 1787. The French government was desperately trying to raise taxes to pay its debts and to prevent default. As the ministers of Louis XVI were well aware, default would make future borrowing much more difficult. Government ministers sought to raise new revenues from all elements of French society, including the nobility, through higher customs duties, excise taxes and the raising of additional sums through state monopolies on salt and tobacco. Most of the new taxes would have flowed from the non-privileged, but that did not stop the members of the nobility from resisting heavier burdens for themselves, through all the institutional means at their disposal.

On the eve of the revolution, French society was formally divided into three Estates. The First Estate was the clergy, numbering about one hundred thousand members and ranging from wealthy bishops to poor parish priests. The Second Estate, the nobility, numbered about 4,000 members. Among the nobles were those who had inherited their titles, as well as those whose titles were bestowed on them by the monarchy. These were mostly wealthy merchants and lawyers. Technically, there were two orders of nobles, the Noblesse d'Epee (nobles of the sword) and the Noblesse de Robe (nobles of the gown, made up of wealthy functionaries, jurists, and merchants). The Third Estate included everybody else in France, about twenty-three million people, ninety-six per cent of the population.

Although France was becoming a more urban, capitalist society in the late 18th century, it was still a largely rural country with peasants constituting the majority of the population. In some ways, the France of the late Old Regime was moving toward increased social rigidity, with top positions in the military even more reserved for the nobility than had been the case in the past. Closing the doors to new talents is dangerous in a class divided society in which a small proportion of the population enjoys enormous privileges.

The French state tried consulting the nobility. It called together an assembly of notables, among them great magnates, senior prelates, members of provincial Parlements, councilors of state, and members of provincial estates and urban municipalities. The government assumed that having hand-picked this conclave, its members would agree to significant tax increases.

The notables dug in the heels and resisted, however. Some of them pointedly argued that only the Estates General had the authority to vote for new taxes. The Estates General, representing all three Estates, had last met in 1614. The notables were summarily dismissed, but agitation among the nobles continued. In various parts of the country, provincial bodies, grouping together the privileged, continued to protest the government's proposals. Having tried consultation, the government resorted to arresting and exiling some of those who were resisting its power to impose a new fiscal regime. The Parlement of Paris, the most important of the Parlements (not to be confused with a modern Parliament), stood up to the monarchy, accusing the royal government of acting illegally. Louis XVI lost his temper with the assembled nobility and proclaimed that "it is legal because I wish it." The monarch departed in a huff and a duke and two councilors were arrested and exiled.

Significantly, members of the Parlement of Paris and of the provincial Parlements condemned the arrests and declared that individual liberty was a natural right of the subjects of the king. They were using the narrative of Enlightenment philosophers and reformers -- invoking the rights of man and citizenship -- as arrows in their quiver to fire at the government. This was playing with fire, using revolutionary concepts to promote the cause of a nobility, whose very raison d'etre was traditional. More arrests followed.

The revolt of the nobles, the Revolte Nobiliare, rendered the French state incapable of reforming itself, of coping with its fiscal crisis. The government was backed into a corner. Unable to negotiate a new loan in 1788, the French state called a meeting of the Estates General for 1789.

The summoning to the seat of government at Versailles of the Estates General required each Estate, most significantly the Third Estate, to convene meetings all over the country to select delegates. The Third Estate was to have as many delegates as the other two estates combined. The critical question was whether the estates would sit together as one body, in which case the Third Estate would dominate, or separately.

Most of the representatives of the nobility perceived the danger of being eclipsed by the Third Estate and insisted that the estates sit separately. In taking that stand, the nobility was, in effect, setting itself above and apart from the Third Estate, the vast majority of the population. Instead of being seen as championing the rights of the population, the nobles appeared in the guise of their oppressors, motivating the representatives of the Third Estate to speak and act for themselves. Organization began, first among the wealthy middle classes. These opponents of the nobility were joined by liberal nobles who favoured reform. Increasingly active were the political clubs which already existed in Paris and in many parts of France. The clubs corresponded with one another. Journalists did what they always do. They took to the cafes to chew over what was happening.

Conflict with the nobles radicalized the middle classes. In December 1788, the Abbe Sieyes issued his famous pamphlet titled What is the Third Estate? "Who would dare to deny that the Third Estate has within itself all that is necessary to constitute a nation?" he wrote. "Take away the privileged orders, and the nation is not smaller, but greater...What would the Third Estate be without the privileged orders? A whole by itself, and a prosperous whole. Nothing can go on without it, and everything would go on far better without the others...This privileged class is assuredly foreign to the nation by its do-nothing uselessness."

In May 1789, the representatives of the three Estates assembled in Versailles. Feverish excitement was mounting in Paris and in provincial cities. On June 20, the representatives of the Third Estate met in an indoor tennis court. There they declared that the "National Assembly is in being" and took an oath "never to separate" until a new constitution had been established. The French state tried to find common ground with the Third Estate, now constituted as the National Assembly. But the king was mobilizing soldiers in Versailles and Paris, preparatory to dissolving the Estates. All France watched the coming showdown. In the newspapers and cafes in the meetings of the clubs, it was all-consuming.

Thousands of Parisians traveled to Versailles to stop the government's attempt to shut down the Estates. Troops, sympathetic to the demand for change, refused to fire on the crowds. Centres of opposition to the government had formed at the Palais Royal, the City Hall and other points in Paris. In Paris, fearful that the troops were about to enter the city, the people were mobilizing -- wage-earners, master craftsmen, shopkeepers and women.

New political forces were making their power felt. The mass of the population in Paris and the peasantry in the countryside were about to change the course of history.

The revolt of the French nobility had rendered the French state dysfunctional. The revolution, directed against the nobility, was underway.

In the extraordinary weeks that followed, the revolution unfolded in Paris. The Bastille, symbol of royal autocracy, was stormed on July 14, 1789. In the countryside, in the wake of what came to be called the Great Fear, with the peasantry anxious that the authority of the nobility was going to be restored through the use of force, peasants stormed the manor houses in many parts of France. In some places, they burned them to the ground; elsewhere, they seized the documents that spelled out the obligations of the peasants, to pay sums to the local landlord or to provide labour. On the night of August 4, 1789, the National Assembly legislated an end to formal feudal privilege. In 1793, the obligations of peasants to landlords that had ceased to exist for all practical purposes in 1789, were abolished once and for all. The three Estates ceased to exist. All men (not yet women) became citizens.

We need not rehash the phases of the French Revolution, the implementation of the Terror in 1793, the transition to the Napoleonic empire and the later restoration of the monarchy. The Old Regime in France was never resurrected. The revolution swept it aside and established, in its place, a new bourgeois order, with a different conception of citizenship and a new kind of state.

What is significant for our time is that the crisis that opened the way for the French Revolution began with a revolt on behalf of the strongest beneficiaries of the old order. Through their actions, they rendered the state incapable of adaptation.

Of one thing we can be sure, the social upheavals of the future will not resemble those in France prior to and during the revolution. The combustible materials that led to that transformation were of an entirely different sort from those that exist today. But combustible materials in contemporary society are readily observable to those who take the trouble to notice. And upheavals there will be.

The harsh policies being pursued in North America, the U.K., and the Euro Zone countries are pressing the ill effects of austerity down on the large majority of the population, while the wealthiest and most economically powerful see their incomes soar and are assured that the state will bail them out when necessary. This is their state and they know it. The young in the advanced countries are having their futures stolen from them. Opportunities shrink and the price of post-secondary education soars ever higher. Upward mobility, always the safety valve in capitalist society, is being choked off.

There is a real possibility that some of these regimes -- driven on by dominant, even triumphalist, forces on the political right -- will be rendered dysfunctional or partially dysfunctional. The fault lines in the countries on both sides of the Atlantic are all too easy to perceive. The United States has a dysfunctional constitution and deeply entrenched class divisions that often coincide with racial differences. Canada is reverting to the status of a supplier of raw materials to the U.S. -- becoming an energy superpower in the eyes of the government as a consequence of the tar sands -- while the manufacturing sector recedes. The Harper government is content to exercise its majority rule while turning its back on Quebec. Not since the Conscription crisis of 1917 has Canada had a majority government with so little representation from Quebec. The Cameron government is shedding half a million jobs in the public sector, trebling post-secondary tuition fees, and imposing savage class rule on the U.K. on a scale that would have made Margaret Thatcher envious. The German and French governments, at the centre of the Euro Zone, are forcing tens of millions of Europeans to live in depression conditions because Merkel and Sarkozy refuse to complete the monetary union with a social union that redistributes capital in the form of tax revenues across Europe. It is a regime of, by, and for, bankers.

History does not run along a linear path as people, including political leaders, often assume. Even the most imposing political and state structures are much more fragile than is normally thought. It is easy to forget that events now long in the past were once in the future. During the two years leading up to the outbreak of the French Revolution, contemporary observers would likely have concluded that a new age of privilege and political reaction was in the offing in France.

Those at the helm on both sides of the Atlantic are playing dangerous games. It is far from certain that they will be able to control the forces they are unleashing. Some may believe that we live in the eternal present of neo-liberalism. History shows us that that is not a good bet.

The old spiritual is almost certainly a better prognosticator: "No more water, the fire next time."

This article was first posted on James Laxer's blog.

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