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I N T R O D U C T I O N

WHO REALLYRULES AMERICA

In the 1980s comic film, Moscow on the Hudson, avisiting Russian defects to America while touring with hisSoviet group in a Manhattan Bloomingdale’s. The Russian,played by Robin Williams, rejoices in his newfound free-dom. But as he learns about his new country, he gets con-fused. He’s free to shop at Bloomingdale’s but he can’t af-ford it. He appreciates that Americans are free to vote intheir leaders, but he can’t tell the “bad guys” from the goodguys. In the Soviet Union, at least you knew who the “badguys” were and you had no doubt that they ran the country.

A friend of mine who immigrated from Eastern Europetells me he feels a bit like Williams. In the Soviet era, every-

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one in the Eastern Bloc knew who was running the show.Nobody believed in their phony elections. Few in East Ger-many or Poland thought their gray, aging presidents in theirbig bulky suits were anything but puppets of Soviet rulers.And nobody believed the newspapers or television becauseeveryone knew they were pure propaganda.

In the United States, my friend says, things are muchmore confusing. There are “real” elections, but he isn’t surewho is really running the country. Is it the president? Is itthe Republican Party? Is it “special interest” groups play-ing behind the scenes? Is it truly the American public?

Many of my students at Boston College are beginning toask similar questions. They know the president—currentlyGeorge W. Bush—has great power but they are not sure ifhe is really making the decisions. They cannot answer withconfidence the questions about who really rules America.They are not sure about what stories to believe in the me-dia. They are not sure why the country has gone to war inIraq. They are not sure that democracy is still alive and welland they wonder whether their vote matters.

This is not the way democracy is supposed to work.Democracy should be transparent. It should lead voters tohave faith that the leaders they elect are in charge, thatthese leaders are accountable to the people, and that themedia are not publishing propaganda. They should be get-ting the truth about who rules their country—and it shouldbe the people themselves.

I am writing this book because I think Americans are not getting the real story. I believe their questions and fears are based on reality, reflecting a dangerous deterioration ofAmerican democracy. I am not a conspiracy theorist and I

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am disturbed by the wild conspiracy ideas floating aroundon the Internet and in ordinary conversation. But there isa system of hidden power in America.

This book explains the hidden power structure, but it is not just the existence and power of the regime that is hidden. The capacity of ordinary Americans to make thekind of democratic change that inspired Thomas Paine andThomas Jefferson has itself become veiled. My goal in thisbook is to pull back the curtain to reveal both forms of hid-den power: the power of those who govern and the powerof ordinary Americans like you, the reader. The hiddenrulers are not the small cabal of evil plotters imagined inmost conspiracy theories but are deeply entrenched socialforces and institutions with far more power and sophisti-cation. The hidden power of the people is part of a demo-cratic tradition of political participation and dissent thathas been represessed and forgotten. When the curtain istorn down, the promise of American freedom that RobinWilliams was looking for can become real.

T H E R E G I M E

In discussing the hidden power of who really rules Amer-ica, I am talking about a complex, historically entrenchedsystem that is now almost seamlessly integrated with ourelections and our official leaders. I call it a regime. WhenAmerican leaders talk about regimes, it is usually about theevil governments of North Korea, Iran, Syria, or Cuba. AsU.S. power brokers see it, a regime is a repressive govern-ment somewhere else in the world that the American pub-lic ought to distrust. Regime change, by the same logic, is

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about how the United States can rid the planet—as it didSaddam Hussein’s regime in Iraq—of a government that itportrays as a threat to civilization.

The dictionary defines a regime as “a manner, method,or system of rule or government.” If we take this moresober approach and view any “system of rule” as a regime,then the U.S. government is also a regime and the historyof the United States—as of other nations—can be seen asa succession of regimes. American regimes are entrenchedsystems of power and ideology, and regime changes athome, while not revolutions, are great dramas, creatingseismic shifts in power and social values.1

Our current regime is a corporate one, and I start thisbook by describing what a corporate regime is and how itis weakening our democracy. This is the third corporateregime in American history and, while more global andhazardous than its predecessors, it is not entirely new.

Theodore Roosevelt points to a key difference betweenour corporate democracy and a dictatorship. In a dictator-

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T h e I n v i s i b l e G o v e r n m e n t

“Behind the ostensible government sits enthroned an invisiblegovernment owing no allegiance and acknowledging no re-sponsibility to the people. To destroy this invisible government,to befoul the unholy alliance between corrupt business and corrupt politics, is the first task of the statesmanship of the day.”2

president theodore roosevelt

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ship, the real government is visible. In our democratic re-gime, hidden power reigns.

The roots of our current regime lie in the Gilded Age ofJohn D. Rockefeller, J. P. Morgan, and other early captainsof industry, who helped shape the first corporate regime,and in the Roaring Twenties of Warren Harding, CalvinCoolidge, and Herbert Hoover, the leaders who presidedover the second corporate regime. Conceived in the 1970sand shaped by the election of President Ronald Reagan in1980, the current corporate regime has been steadily con-solidating power, whichever party is in office. The result sofar: profits grow and democracy shrinks. Bush has pushedthe envelope, taking the regime in more radical directionsas Washington becomes a money swamp and people likeyou and me have too many days when we feel helpless tochange it.

The American system wasn’t supposed to work this way. The Founders crafted the Constitution to ensure that“We, the People” would have a voice in our own affairs—and in those of the nation. The Constitution embraced anelaborate set of checks and balances that were to separate government agencies and prevent concentration of pri-vate power. James Madison, the author of the Constitution,wrote that “There is an evil which ought to be guardedagainst. . . . The power of all corporations ought to be lim-ited. . . . The growing wealth acquired by them never failsto be a source of abuses.”3 In today’s regime, the world’sbiggest global firms have accomplished what the FoundingFathers most feared. They have hollowed out the institu-tions that enabled ordinary Americans to have a say in howtheir land is governed. To cover up this highjacking of ourconstitutional and democratic gains, the regime has tar-

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geted you and me with a classy Madison Avenue arsenal ofmanipulation techniques—including democratic rhetoricand practices that have helped hide the very existence ofthe regime.

F R O M T H E E L E C T I O N T R A P

T O R E G I M E C H A N G E

Most Americans understand that individual corporations—such as Nike, Wal-Mart, General Motors, and Citigroup—have great power. But they see only the skimpiest out-lines of the hidden connections that weave together thesehuge companies with one another, with the political lead-ers of both parties, with the media, with schools and hos-pitals, and with the military—the systemic connections thatcreate a regime. Because they barely see the shadows ofthis ruling system, it is even harder for them to see theirown hidden power to create regime change.

In all nations, regimes spin elaborate myths that disguisetheir own power. Sometimes this comes in the form of ob-vious propaganda systems. In such societies, it is actuallyeasier, as Robin Williams discovers, to figure out who is ruling and the lies they are telling. In democracies like the United States, it is much harder to tell who really is incharge and to distinguish truth from propaganda. This ispartly because a corporatized government and media worktogether to create and market some of the world’s most so-phisticated deceptions and illusions. It is also because theregime is so intertwined with democratic rhetoric and pro-cedures, and because people see democracy and change it-self as tied mainly to voting the bums out of office.

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This linking of power and change with winning electionsis part of a set of misperceptions about democracy that Icall the Election Trap. It has taken root among Democratsand Republicans, red and blues, liberals and conservatives,even many radicals and libertarians. In short, nearly allAmericans are ensnared in the Election Trap, and I havediscovered myself sometimes seduced into it, too.4

The Election Trap inflates and distorts the role of thehorse race in democratic politics. It makes near-term elec-tions the primary object of political struggle and electoralvictory the criterion for measuring power. Strategically,winning becomes everything. The Election Trap was onfull display during the 2004 presidential elections, mosttragically by the Democratic Party. Party leaders and mostvoters in the Democratic primaries selected John Kerry astheir nominee because they knew he was a war hero andthought he had the best chance of winning. They didn’tknow much else about him. The philosophy of the partywas summed up in one phrase: “Anybody but Bush.”

The Democrats were caught—like a hungry mouse whosees nothing but the cheese in the mousetrap—in the Elec-tion Trap. The Party was focused like a laser on winning theelection. It would choose anyone who could win, even if or-dinary voters knew virtually nothing about what he stoodfor. This has been the story not just of Kerry but of the Democratic Party leadership over most of the last threedecades. Its whole identity was about winning. This led totwo predictable consequences. First, it led the party to losethe elections. Second, it meant that even if the Democratshad won, the party would not have created regime change.

The problem was not that Kerry and other Democrat

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leaders tried so hard to defeat Bush and win the election.It was that their obsession with winning helped underminetheir ability to set forth a principled agenda that might haveactually persuaded people to vote for them. For the Dem-ocrats to win, they have to convince ordinary citizens thatthey are going to help make their lives better. They need aphilosophy of governing and of regime change, not just ofwinning. The Republicans are better at the horse race, withmore efficient operatives and hacks, more money, and moresophisticated propaganda. The politics of the Election Trapalmost always favor Republicans, especially in the currentera where elections are driven by money. Given these re-alities, the Democrats could have won recent electionsonly if they had actually advanced a politics of conviction.

The sad Democratic experience in 2004 is just one ex-ample of the way the Election Trap works. The larger storyis about how democracy itself has become a vehicle for un-dermining itself. The regime is the winner and the peoplethe loser.

The main catalysts of regime change in America havenot been parties glued to the next election, but socialmovements that operate on the scale of decades ratherthan two- and four-year electoral cycles. Political partieshave historically become agents of democratic change onlywhen movements infuse the parties with their own long-term vision, moral conviction, and resources. Abolitionists,suffragettes, minorities, or labor movements have some-times succeeded in creating more democratic systems, asin the New Deal. The lessons of their past successes for to-day is one major theme of this book. Evangelical religiousgroups and social movements of corporations themselveshave created their own forms of regime change, most re-

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cently in 1980 when they came together to create the cur-rent governing regime. They also have much to teach usabout hidden power and how to change it.

H I D D E N P O W E R , D E M O C R A C Y ,

A N D H E G E M O N Y

Hidden power exists in many societies, but, as Teddy Roo-sevelt pointed out, it can be particularly severe in capi-talist democracies. Our political leaders and millions ofAmericans celebrate the increasing spread of electionsaround the world. They believe these new elected regimesmake power transparent and give people far more demo-cratic control over their own nations and lives. This hassome truth in many countries, and our celebration reflectshow we understand our own democracy. The cherishedsovereignty of “we the people” is enshrined in our ownelections, and we yearn to believe in it. But looking behindthe parchment and ideals, we see that popular control inour own democracy and in much of the world is increas-ingly a fantasy.

Part of the disconnect between democratic ideals andreality arises out of the nature of capitalism. In every soci-ety, but especially in capitalism, it is impossible to separateeconomic and political power. As Karl Marx, the most fa-mous critic of capitalist societies, observed more than acentury ago, setting up formal political mechanisms forrepresentative democracy—including constitutions, elec-tions, and rule of law—does not ensure that the people’selected representatives will be accountable to them; infact, Marx believed that the whole point of capitalist de-mocracy was to create a visible government as a cover for

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the invisible one.5 If economic power is skewed, and thegap between rich and poor is great, elected leaders willhave other masters in the shadows and true democracy willwither. In a different context, Thomas Jefferson also sawhow inequality shaped politics when he observed the cor-rupt and economically polarized aristocratic societies ofEurope. Jefferson believed that the United States couldbecome and remain democratic only if the new nationcould create and sustain relative equality of land andwealth.6

The gap between rich and poor is always large in capi-talist countries and has become vast today, greater than atany time since the Roaring Twenties and growing rapidlyenough to make Jefferson roll over in his grave. In March2005, Bill Gates, the world’s richest person, was worth$60.6 billion.7 Forbes magazine, in its 2004 account of thefour hundred richest Americans, noted that as the numberof poor Americans rose to 36 million, the net worth ofAmerica’s four hundred richest people rose to an unprece-dented $1 trillion. Forbes magazine noted that this astro-nomical sum was more than double the federal budgetdeficit in that year and equal to the gross domestic product(GDP) of Canada.8 Gates’s corporation, Microsoft, is justone of two hundred gigantic, interlocked, and politicallyactive firms who produce and control approximately 25percent of the world’s wealth.9 Such concentrated eco-nomic power subverts the power of elections to createrulers who serve ordinary people, both in America andaround the world. It inevitably makes corporations majorplayers in our new global regime.

The hidden power structure of the regime, though, is

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more than just a wealth pyramid. Politics is simultaneouslyabout economic and moral authority. The power structuresof capitalist democracies reflect underlying economic hier-archies as well as politically orchestrated moral values andcultural identities that give meaning to people’s lives. Agood way to view U.S. regimes is as a blended hierarchicsystem of money and morality whose outlines are onlyvaguely seen or understood by the population. To see theseregimes clearly, you need to put on 3-D glasses that al-low you to see beneath the surface of the politics in theheadlines.10

In his recent best-seller, What’s the Matter with Kan-sas?, Thomas Frank asked how red staters could keepelecting Republicans who dish out economic policies ru-inous to their own jobs and standard of living.11 The answerto his question involves culture and ideology, but goes farbeyond the discussion of religion and moral values thatdominated much of the country after the 2004 elections. Itis a question central to almost all societies and regimes:how hidden and exploitative power is disguised and justi-fied in any governing system, whether democratic or not.

Ruling regimes have always worked hard to producewhat Antonio Gramsci, a great early twentieth-century Ital-ian social thinker, called hegemony.12 By this he meant thesystem of thought and persuasion that led people to assignmoral virtue and pledge allegiance to the existing order, nomatter how much they are suffering. Gramsci was writingfrom a prison in Mussolini’s fascist Italy, where he strug-gled to understand why so many Italians flocked to the dic-tator’s oppressive cause.13

All power structures seek to draw their consent from the

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people. This is because ruling by the barrel of a gun is costlyand inefficient. In the United States, creating hegemonyhas moved to the very heart of hidden power. Our formaldemocratic procedures have become one of several keyhegemonic tools for disguising the eroding democraticsubstance of our current regime.

Despite Mussolini’s hegemonic success, creating hege-mony in dictatorships, slave societies, fascist orders, andother nakedly coercive regimes can be very difficult. Thepower structure itself is typically transparent and peoplesubmit to it because they have no alternative. But they mayresist internally, just waiting for the moment when therulers put down their guns or sleep.

In capitalist democracies, though, creating hegemonycan be easier, even if the regime acts against the interestsof its own people. This is because all the elements of West-ern democracies—elections, constitutions, and the rule oflaw—are astonishingly powerful hegemonic instruments.By vesting citizens with voting power and rights under thelaw, the regime disguises the hidden and unaccountablepower that remains vested in itself. If voters are suffering,they appear to have only themselves to blame for voting thebums in—and presumably can vote them out. This dis-guises the reality that whoever citizens vote in—the cur-rent bums or the next ones—may owe their allegiance lessto the voters than to the corporate regime. It also veils thefact that the substantial freedom the regime offers is nojustification for the freedom that it denies.

In 1956, C. Wright Mills wrote the classic book ThePower Elite.14 It was a devastating critique, arguing thatU.S. democracy was mainly a cover for a power elite made

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up of corporate leaders, top military officers, and politicalelites. Mills believed that this elite, despite its great power,could be changed by social movements, a view that I ex-pand in some detail. But he thought this possible only if thepower elite was exposed and its ruling ideology discredited.This is a daunting task, precisely because of the hegemonicpower of elections and constitutionalism in America, aswell as the growing corporate control of the media and newtechnological powers for controlling popular thought.15

The task of sociologists is to peek behind the curtain ofhidden power. In this book, I look at the new systemic char-acter of today’s hidden power and hegemony. It is by far themost corporatized and globalized regime in all of history,and it operates with great hegemonic sophistication and innovation. But the regime has vulnerabilities, and I drawheavily on the history of earlier regimes and regime changesas a window into our current system. Only by understand-ing how social movements created regime change in ear-lier eras is it possible to see a hopeful future today.

W H E R E W E G O F R O M H E R E

Many Americans are disenchanted with the current systemof power but don’t see any realistic alternatives. The ideathat there is no alternative is a self-fulfilling prophecy. Wecan create regime change only when we believe that a better alternative exists. The great question of the twenty-first century is what a post-corporate regime will look like.What is an America freed from corporate rule? We are so accustomed to the reign of big corporations that wescarcely bother to ask the question.

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Here, I try to ask and answer it. I offer a vision of the newregime that lies within our grasp. While many will find myagenda idealistic, it seems so only because it is not achiev-able within the current regime. Regimes are systems forlimiting the imagination and locking us into the currentterms of discourse. When a regime falls, as it did in 1932and 1980, changes that looked impossible can become com-mon sense.

New crises are already fanning the flames of new socialmovements seeking regime change. Regime change hap-pens because of serious cracks that fracture the system andweaken its power. Such cracks are emerging today and canproduce a frightening regime change to the right, leadingto the Orwellian scenario I call “fascism lite.” Many new de-velopments, including terrorism and the war against it, havehelped to make this a real possibility. But today’s regimecrises can also lead to a more hopeful transformation.

Regimes change when their crises get so acute that newsocial movements arise from among the ordinary peopleharmed by the ruling regime. True, the hidden power ofthe people to change the regime—which produces greatpopular cynicism—makes progressive regime change verydifficult, as does the great power of the corporations them-selves. But new movements are already on the scene thatare helping to reconnect ordinary citizens with their long-lost traditions of challenge to the ruling system. Despitetheir lack of big money, the new movements are worthychallengers of the new global corporate goliaths. In the lastfew chapters of this book, I show how they and the Demo-cratic Party can work together to change the country.

Einstein said that “the world is a dangerous place, notbecause of those who do evil, but because of those who look

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on and do nothing.” Today, this is a call for Americans whoare not happy with their government to recognize and ex-ercise their own hidden power. I show here how hiddenpower works, how it could lurch to the right or left in un-expected ways, and how you can make a difference.

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This chapter has been excerpted from

Hidden Power What You Need to Know to Save Our Democracy

by Charles Derber

Published by Berrett-Koehler Publishers Copyright © 2005, All Rights Reserved.

To buy the book or learn more about it, click here