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The
Corporatocracy
Written by Barry Beck
Here
are some thoughts about abuses concerning the economy and how we have
moved toward Corporatism, a form of government of, by, and for
high-income people. The
trends over the last thirty years have allowed presidents and Congress
to turn over the creation and destruction of laws to corporate lobbyists.
It has caused a situation where representatives from corporations write
and approve every new law, even the ones that regulate their own industry.
This has encouraged more downsizing (layoffs), outsourcing of jobs,
privatization, deregulation of industries, consolidations, mergers until
a few companies dominate each business sector that is deregulated. Added
to this came the weakening of antitrust and banking rules and contracting
out services that should be regulated.
At the
same time, antitrust regulations were repealed and media conglomerates
have merged into five to seven major companies (for example, GE (NBC),
Disney (ABC), NewsCorp (Fox), Viacom (CBS), AOL/Time Warner (CNN.) If
we include two more major companies, we have virtually every major movie
studio, record company, internet outlet, magazine, and telephone company.
(In other words, most communication.)
These tendencies
starting during the Reagan Administration, only slowed slightly when
Clinton was president or Democrats controlled Congress, but has never
stopped during the last thirty years, privatizing even aspects of the
military, emergency services and services that should not be deregulated
and split. Conservative commentators have made it seem like privatization,
the weakening of unions, and deregulation have been beneficial to the
nation, but it has only opened the door to gross incompetence, negligence,
and greed when an industry is allowed to go in this direction. It can
hardly be called capitalism. It is corporatism. It is more like
socialism... but only for extremely high-income people and large corporations
and conglomerates.
The privatization
of everything has so run amok that even the military (through outside
and unregulated contractors) and Medicare (and Social Security if Republicans
had their way) are becoming privatized with less and less regulation,
oversight, and accountability.
Philosophically these ideas derive from the political theories
of Leo Strauss and the economic theories of Friedrich
A. Hayek and Milton Friedman (sometimes called the Austrian School
or the University of Chicago school of economics.) It is a belief that
the only role of government is to protect property and enforce contracts.
Trickle-down economics is the belief that if the rich are allowed to
get richer, they will invest and grow the economy with mazimum efficiency
and the whole society will benefit. That might be a reasonable idea,
except it never seems to work that way. Stock prices have usually been
high; that used to be an leading indicator that the entire society is
benefiting. But today, the stock price can be high, the company executives
can lead a company to failure, the executives and CEO are paid a fortune,
employees are laid off, and jobs are sent oversees where wages are minimal.
This trend was reinforced by NAFTA and free trade. Deregulation and
privatization presupposes that the market will cause CEO's self-interest
to lead to the public interest, but the failure of voluntary compliance
and self-policing with lobbyists writing the very legislation that regulates
them has caused much harm. During WWII, corporations paid 50 percent
of war, today it's 7 percent. CEO to worker pay ratio in 1980 was 40:1;
now it's 350:1. In 2006, the Congress passed major legislation on bankruptcy,
credit, finance, and revamped Medicare. These changes benefit the corporation
and not the citizen.
When a
government's leaders or businesses routinely seek out private sector
individuals or businesses and, in exchange for political support, bestow
favors on them, the society is said to be in the grip of crony capitalism.
The favors generally take the form of monopoly access to certain markets,
preferred access to sales of government assets, and special access to
those in power.
Theodore
Roosevelt proclaimed that the New Nationalism "maintains that every
man holds his property subject to the general right of the community
to regulate its use to whatever degree the public welfare may require
it."
Adam Smith's The Wealth of Nations is somewhat misunderstood.
The invisible hand actually refers to the unintended consequences
of too much protectionism. Adam Smith was not for unregulated laissez-faire
markets, but maintained there must be some regulation of trade and some
provision set aside by society for the poor, sick, and aged. He also
believed that though the state (government, sovereign, commonwealth)
is very inept at regulating trade, it is also true that tradesmen (corporations)
are also bad at running (regulating) government and writing laws. He
advocated a social policy (that people should act in their own
self interest), and described an observed economic reality (that people
do act in their own interest). Smith was not claiming that all
self-interest has beneficial effects on the community. He did not argue
that self-interest is always good; he merely argued against the view
that self-interest is necessarily bad.
Resources:
Articles and books
by Naomi Klein:
Ownership
Society
Baghdad: Year
Zero
No Logo: Taking Aim at the Brand Bullies
The Shock Doctrine: The Rise of Disaster Capitalism
Other resources:
Why
the Media Can Legally Lie
When Corporations Rule the World - David C. Korten
Neo Classical and Austrian Economics - Peter J. Boettke
Why I Am Not an Austrian Economist - Bryan Caplan
The Corporation
- a documentary
Confessions of an Economic Hit Man - John Perkins
A Game as Old as Empire - introduction
by John Perkins
Bad Samaritans: The Myth of Free Trade and the
Secret History of Capitalism - Ha-Joon Chang
FISA and
the Telecoms - Keith Olbermann
Republican Gomorrah - Max Blumenthal
William Rivers Pitt has written an excellent summary
detailing how, in spite of the grave and appropriate mistrust that early
Americans had of corporate power, corporations (with the help of the
1886 Supreme Court decision granting that corporations are persons)
become supercitizens, whose enormous financial resources and resulting
ability to manipulate policy has resulted in a government overwhelmingly
aimed at serving their interests, rather than ours.
Here's a quick précis. For the first 100 years or so of U.S. independence,
and reflecting the U.S. experience of large British corporations (such
as the British East India Company) as the henchmen for British rule,
U.S. corporations were appropriately regulated and easily dismantled
if they became a threat to the public trust. Then came the Civil War,
which allowed the profits and power of corporations to mushroom. This
power enabled corporations to buy legislatures and courts, and soon
thereafter the Corporate Supercitizen was born, when corporations seized
upon the 14th amendment to the Constitution (which was intended to ensure
the rights of freed slaves to legal due process) as a means of gaining
legal recognition as persons.
With the carte blanche this protection allowed, the power and influence
of corporations exploded, in an effective coup d'état. WWII and
the impending Cold War led to the entrenchment of corporate power, and
its further insinuation into government, via the permanent Military-Industrial
Complex, which Eisenhower identified as a threat to democratic sovereignty
in his 1961 farewell address. Thanks to the Cold War, along with Korea
and Vietnam (and by this time, it becomes hard to see whether wars are
driving corporate power, or vice versa) and the concomitant untold billions
spent on expanding the U.S. military, coupled with the rampant deregulation
of corporations initiated during Reagan's administration and which continues
apace today, "what can only be described as total victory over
democracy was achieved by the corporate powers-that-be"---a victory
that the never-ending 'War on Terror' in place will serve to solidify,
in perpetuity, as the U.S. becomes a government run of, by, and for
Corporate Supercitizens.
This is quite frightening, and rings very true as one---perhaps the
most----foundational driving problematic in the calculus of U.S. economics,
politics, and culture. Pitt tells us that sixty years after the personhood
decision, Supreme Court Justice William O. Douglas concluded that it
"could not be supported by history, logic or reason." This
decision needs to be overturned; else it is very unclear how lasting
reforms in any other area (corporate consolidation of and influence
on media, lack of healthcare and other appropriate human services, an
end to universal war, the need for campaign reform, etc.) will ever
be accomplished.
Conservatives
were at an all time low in 1964 after the defeat of Goldwater. It was
followed by ten years of very progressive legislation. As a response,
several conservative think tanks, magazines, mail order, and media outlets
were founded and funded by Richard Viguerie, Grover Norquist, and the
Coors family. Read more about think tanks
and former Senator Bill Bradley's summary
of the trend.
In the
1980s, the Fairness Doctrine was revoked and media companies were deregulated
and merged into five or six major companies (for example, GE (NBC),
Disney (ABC), NewsCorp (Fox), Viacom (CBS), AOL/Time Warner (CNN.) If
we include two more major corporate groups, we have virtually every
major movie studio, broadcast or cable company, record producer, internet
outlet, magazine, and telephone company. (In other words, most sources
of communication to the public.)
Regarding
media sources, consider that forty years ago there were three TV networks
with a half hour of news each day. Today we have hundreds of TV channels,
three major all-news networks, and the Internet where anyone with a
modicum of technical aptitude can give information and make their views
known. One would think that would make us better informed.
Yet the
opposite is true. These are some possible reasons:
- The
FCC's Fairness Doctrine (which encouraged greater social and
political responsibility on the part of media) was ended.
- There
are now five corporate conglomerates that control 80% of TV, radio,
movies, computers, telecommunications/telephones, print media, cable,
and Internet. Thirty years ago, over 500 companies owned 80% of the
media.
- Just
as everyone can choose a radio station that plays the music they like,
everyone can now choose the TV station that reflects their own interests
and opinions. So we no longer have a common experience in what we
are hearing or how we are taking in information.
In part,
due to the above, news networks are not driven to present the news based
on what people need to know. They are under enormous pressure
to present what will grab immediate interest (since people can just
flip the channel if they get a little bored.) News now is geared to
offend the least amount of people. Companies don't want to offend the
government and Congress who are making important decisions on mergers
and additional properties that the parent company of news organizations
want approval to buy. So we have the "O.J. phenomenon." The news getting
the highest ratings are what we get. We get the latest breaking news
on Michael Jackson, Jennifer-Brad breakups, the British royals, Jon-Benet
Ramsey, Scott Peterson, car chases, and Superbowl wardrobe malfunctions.
If it involves dramatic moving pictures, sex, sports, race, murder,
it's considered important national news. The so-called "reality" shows
are what we are taking for reality, for real life, and for information
that we need to know.
Aside
from the mainstream media, we need to be aware that the internet is
a totally horizontal electronic publication medium. But quality will
vary widely, and hierarchical control over content is extremely minimal.
So there is a greater responsibility for selecting what we hear and
read and accept. Broadcasters and publishers are responsible for providing
content. Hopefully, they will seek to provide balanced and accurate
content and abide by general ethical standards. However, there are no
guarantees, and the whole thing depends on a pair responsibilities:
those of the receiver and of the sender or information. Our best defense
is choice, awareness and critical thinking and judgment. Maintaining
standards of quality and credibility is everyone's responsibility.
"The
first stage of fascism should more appropriately be called Corporatism
because it is a merger of state and corporate power." Benito Mussolini,
the inventor of fascism
Defining
Fascism
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