America’s New Normal Challenges the Pareto Principle

America’s New Normal Challenges the Pareto Principle

“Looks like the Pareto Principle has been proven to be correct once again…. Don't mean to sound cynical but whether people are becoming poorer and desperate or expressing deep discontent, nothing is going to change. The [top] 20 percent are still going to dictate terms with their immense control over media and money.”

The quote above is one thoughtful reader’s response to the US presidential election campaign as Donald Trump appears to be losing ground, largely through his own off-the-cuff bigotry and xenophobia, and the leftist challenge of Bernie Sanders seems to have fizzled out as the Democratic party unifies behind Hillary Clinton to defeat their common enemy: Donald Trump.

The Pareto Principle – named after the work of Italian political sociologist, Vilfredo Pareto (1848-1923), is part of a larger theory that may be summed up as the inevitability and “naturalness” of elite power. The history of power in all societies everywhere is one of elites – some fox-like and cunning (elite democracy?), others leonine and masculine (rule by force) – circulating in an endless series of births, deaths and re-births. And quite right too, ‘elitists’ assert.

So whatever the political label or rhetoric, elites always rule. The Pareto Principle contends that about 20% of any population basically produces 80% of the desired results – whether we refer to police officers fighting crime or teachers educating students, or ownership of wealth and the earning of income. Adding to this tradition, other major elite theorists, such as Robert Michels, argued for an iron law of oligarchy: whichever political party – revolutionary or reactionary, fascist, communist or democratic, conservative or liberal – gains power, it is bound to be ruled by an elite minority that is better organised, more gifted, and effective, justly easing out the masses from real power.

Elitism certainly has a ring of truth about it, and confirms the cynic in their cynicism – that nothing ever truly can or ever will change. But its take on reality suggests that the future looks just like the past, defying radical historical shifts in power – between classes or races or nations, for example.

Elitists like Pareto seemed to revere hereditary aristocracies where the ‘talents’ reigned supreme and democracy posed a threat, and Marxism threatened complete annihilation. Pareto’s birth in 1848 – a year of democratic revolutions in Europe as well as the publication of the Communist Manifesto by Karl Marx and Friedrich Engels, and his death in 1923 in an era of rising fascism, tells its own story of fear of change and a desire to return Italy to the past glories of the Roman empire.

The end point of Pareto’s predictions is also open to question and worth exploring in the US context. The change that Sanders and Trump represent is explicable only in the context of recent political history – increasing dissatisfaction with elites on Right and Left exemplified by insurgencies from the Tea Party and Occupy Wall St, respectively. The Occupy movement became nationwide, involved millions of people and expressed deep discontent and anger, much of it shared among tea partiers on the right, especially in the areas of military spending, corporate welfare, and opposition to special interests, especially the big banks that were bailed out by taxpayers after the 2008 financial meltdown.

Those movements were the tinder-wood for the Trump and Sanders insurgencies against their respective party elites in the 2016 primaries. That, according to American sociologist Alvin Gouldner, means where there is an iron law of oligarchy, there is an equal and opposite law of struggle for democracy, an axiom especially true in the modern era. It is just a matter of time before the democratic eruption comes.

It might be worth considering another Italian thinker – Antonio Gramsci – who wrote about intellectual hegemony, political power, and political transformation: hegemony is almost always contested more or less openly and maintaining hegemony is no easy process. Gramsci offers hope through struggle and exposes the superficiality and inherent instability of elite domination, its openness to challenges from below. Gramsci died in one of Benito Mussolini’s prisons but practised what he preached – “pessimism of the intellect, optimism of the will” – and his work inspired millions to keep pushing for change, because change itself is inevitable, given time and the balance of power between the status quo and change makers, those who make real history.

Apply that principle to history and we see that things do change even if the change is partial, incomplete and unsatisfactory to many – the end of apartheid in South Africa, political independence for the colonial world, relative peace in Northern Ireland, major advances in racialized power in the United States, the transformation in women’s rights across (most of) the world.

And if we apply Gramsci to American politics today, perhaps we might see a more complex picture – movements for change albeit tempered by a reassertion by status quo forces, the tentative, uncertain steps towards domestication of a radical agenda with the original impulse hardly extinguished.

Hence, we see that Hillary Clinton and her running mate Tim Kaine have been forced to reject the Trans-Pacific Partnership agreement by the power of the Sanders movement, and because of its appeal to rust-belt white workers, a portion of which are die-hard Trump supporters.

Clinton may not be a fully convinced opponent of Wall St and big money politics – after all, she and Bill make millions annually in speaking fees from the likes of UBS and Goldman Sachs – but she does feel the changing direction of the political wind. We may see some movement on a financial transactions tax on speculative behaviour, strengthening of the Consumer Financial Protection Bureau that Senator Elizabeth Warren fought to establish, and action against corporate concentration.

Senator Elizabeth Warren’s reputation has been enhanced by her stream of effective attacks on Donald Trump, and her campaign to rein in the power of the big banks seems to have been renewed by the Sanders movement. Sanders is acting as a major sponsor of the Warren-John McCain bill to restore key provisions of the Glass-Steagall Act – passed in the wake of the Wall Street crash of 1929 but repealed 70 years later by President Bill Clinton. The Act had prevented banks from speculating with ordinary peoples’ hard-earned savings. Hillary Clinton is committed to pushing a modernised version of Glass-Steagall.

The necessity of higher wages – backed by a new federal minimum wage of $15 per hour – was forced on Clinton by Bernie Sanders’s representatives on the Democratic platform committee at the national convention.

Hillary Clinton was also forced to flip-flop on the abolition of college tuition fees – she is now committed to making state universities and colleges free for students from families earning less than $125K annually – over 80% of all students.

From significant plans for an infrastructure bank to lead the renewal of America’s roads, railways, ports and bridges, to higher taxes on the 0.1% of top income earners, to a public option for healthcare cost reduction, to greater intra-party democracy, including reforming the super-delegates system, Bernie Sanders’s legacy may yet live on should Clinton win the White House.

As Professor Bastiaan van Apeldoorn of the Free University of Amsterdam argues, “The old order may no longer be sustainable; but we may be witnessing an interregnum, with the old order dying and a new one struggling to be born. The choice may increasingly [have to] be one between a real radical (left) reformism or fascism or Trumpism” or whatever form white ethno-nationalist bigotry may take.

“These are critical, transformative, times,” Apeldoorn comments. “With the (still likely) election of Clinton the neoliberal, Open Door, elite will get another lease of life but I cannot imagine it will be a sustained return to normalcy. Both the Trump and Sanders campaigns have made that clear.”

It may not be quite the political revolution Sanders demanded, but it is a major step away from the Trump counter-revolution, and an important nod towards the demands of the Sanders movement, and parts of Trump’s working class political base, and possibly a slightly fairer society. Things could be a lot worse.

But the cost to the American people will have to be paid in energetic vigilance – to ensure a level of democratic political mobilisation to guard against a smooth return to ‘normalcy’ and the Pareto Principle. The new normal needs protection.