Changes in the institutions of nation states in the early 21st century show two parallel trends. On one hand, globalization of the economy, made possible by technological advances in information, transportation and communications, pressures states to abandon their traditional role of regulating economic activity within their borders and to adopt common international rules that allow an unrestricted flow of investment capital among countries and facilitates the deterritorialization of the centers of production and trade. The elimination of protectionist barriers and strict controls by the agencies of the state, aimed at stabilizing internal economic activity while at the same time watching out for the public interest, was introduced by the United States under the presidency of Ronald Reagan (1981-1989) and was decidedly supported by the Bush-Cheney administration (2001-2009). This trend, called deregulation, introduced what Robert Reich, economist and former Secretary of Labor under President Clinton, called supercapitalism. That is a particular form of capitalism that puts multi-national capital investment interests and the consumer culture above the welfare state’s traditional practices of social equality and responsibility. Left behind was the idea that the state, through direct control of economic activity, is called on to protect society from the predatory acts that are a natural part of corporations. Also in question was the tradition of the modern state to offset the effects of inequality in the distribution of wealth through a broad system of social services. In the measure that institutions of the welfare state were dismantled, Reich said, the middle class has shrunk and the division between the rich and the poor has grown.

The issue of the relationship between states and the economy in an era of globalization and how this affects social responsibility practices has won prominent attention today from academics, professionals and the media, especially since the financial crisis began in 2008. The disastrous results of this crisis for the world economy (which have been particularly harmful for Puerto Rico) have also made the issue a priority topic in the public arena, one that has electoral consequences.

The other parallel trend of transformation in the modern state, as seen in the United States, is toward the centralization of political powers in the central government at the expense of traditional state and local rights. Not only has the real and symbolic power of the presidency and the Congress increased, but also the constantly expanding size of the federal bureaucracy, which has constantly extended its tentacles into all phases of the country’s public life. This trend toward centralization is not recent and can be traced to the country’s origins. But there are three historic moments when it accelerated. The first came after the Civil War, when the Union government tried to limit the rights of the southern states, assuming direct control of many of the functions that had previously belonged exclusively to the federated states and not the central government. This episode in the history of the United States is called the Reconstruction. The second time was when the New Deal was introduced in 1933 by President Franklin Roosevelt, proposing that the Great Depression of 1929 originated in the inability of the corporate world, particularly the financial institutions, to self-regulate and to be able to stimulate a recovery of the economy. The federal government, therefore, had to assume an active role in regenerating economic prosperity. This process, which generated huge investments in construction of massive energy and transportation infrastructure, included the creation of multiple regulatory agencies (which still exist today), whose responsibility is to control the predatory tendencies of the market through implementation of strict rules and regulations. Another emblematic measure of the welfare state was the implementation of the Social Security system, which is today considered the country’s most successful protection system. Under Roosevelt, in other words, the welfare state that exists in our times came to maturity, although today it is under attack from neo-conservatives in the Republican Party and its component, the Tea Party.

The third historical moment when the federal government’s reach expanded was at the end of the Cold War with the consolidation of the United States’ economic, military, political and cultural hegemony and its universal recognition as the only world superpower. Managing its hegemonic, imperial role required a highly centralized state that could counteract the centrifugal federalist trends that sought to disperse power. It is not difficult to see that economic and imperial hegemony over various parts of the planet, including situations involving serious political conflicts, required a working alliance between economic agents and the state that would provide continuity to state policies and allow immediate and efficient reaction. The more globalized the economy became and the more urgent the U.S. role as global cop at the service of that economy became, the more imperative it was to centralize political power. This led to the irony that during the Reagan presidency, despite his rhetoric that the size and interference of the federal government had to be reduced, the expenditures of the federal treasury increased exponentially and vastly expanded the military structure, while the federal bureaucracy broadened its power over traditional state and local jurisdictions.

These same historical pressures that led to political centralization have also broadened the power of the president in comparison to Congress, against the principle of separation of powers. For example, the Constitution establishes that only the Congress can declare war, but since the Cold War, presidents have entered conflicts without a formal declaration of war by Congress. Such was the case with Korea under Harry Truman, Vietnam under three presidents, John Kennedy, Lyndon Johnson and Richard Nixon, and more recently in Iraq and Afghanistan under the Bush-Cheney administration. The term “imperial presidency” was coined in recognition of the unusual expansion of executive power.

But centralization is not exclusive to the presidency. The power of the federal courts has also penetrated deeper into the country’s social fabric. There is no area of life in which state policies do not fall under the scrutiny of federal courts. This trend is also seen in Puerto Rico, where the Federal District Court and the federal prosecutor (who answers to the Secretary of Justice, or attorney general) have enormously expanded their jurisdiction during recent decades, under the supposition that their jurisdictional powers are greater than those of the Commonwealth agencies.

One of the formal aspects of the U.S. Constitution that has most contributed to the expansion of the central (federal) government’s powers is the disposition that jurisdictional conflicts between units of the federation (the states) and the central government are to be resolved by the Supreme Court, which is a federal institution. This means that one of the parties in the conflict is designated to resolve the conflict. This represents a violation of one of the universal judicial principles (democratic values), which stipulates that a conflict between two parties should be settled by a third party. In contrast, the Swiss Confederation (Switzerland) assigns territorial jurisdictional conflicts to an independent arbiter from the confederation central government. [It is worth asking whether it would be more consistent with democratic principles to establish a similar mechanism for resolving future jurisdictional conflicts between Puerto Rico and the United States.]

In summary, the road to greater consolidation of political power in federal (central) agencies and the presidency, at the expense of the rights of the territorial units and other branches of the government, has led many historians and political observers to lament the consequences of this trend in terms of the deterioration of democratic principles and the abandonment of liberal democratic values.

It should be clarified that the trend toward centralization is not exclusive to the United States, but rather is a general rule around the world. In all parts of the world, we see an expansion of centralized executive powers and a retreat of the powers of other branches of governments. In Spain, to give one example, the government in power is imposing a policy aimed at limiting the prerogatives of the Autonomous Communities. While they have continued to accommodate their policies to the financial interests of the European Union (ceding traditional sovereign prerogatives), the government has undertaken to halt the practice of decentralization that the constitution grants to Spanish autonomous states. Closer to home, the government of Puerto Rico has attacked autonomous municipalities created three decades ago as a means of decentralization, proposing instead principles and practices based on vertical control. Additionally, it is frequently argued with ever more intensity that the main role of the legislature and the courts is to support the elected government administration’s policies. The issue is a complex one and if we want to continue to follow the values of constitutional democracy, the discussion should be elevated to the public sphere and given the attention it deserves.

Author: Roberto Gándara Sánchez
Published: September 11, 2014.

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