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Corporate Rule = Inequality and Death

My opinion of corporations and what should be done with them is already known -- they should be "de-personed", taxed more than individuals, all shareholders should be employees, all employees should be shareholders, and the concept of "limited liability" should be tossed over the highest cliff. Everything I continue to learn makes me ever more sure of my position.

One of the world's most experienced economists and diplomats, John Kenneth Galbraith, has recently published an op-ed piece in which he states quite forcefully that American corporations -- and most especially the uncontrolled senior managers of US corporations -- are the prime movers behind US social and foreign policy.

"[C]orporate power has shaped the public purpose to its own needs. It ordains that social success is more automobiles, more television sets, a greater volume of all other consumer goods - and more lethal weaponry. Negative social effects - pollution, destruction of the landscape, the unprotected health of the citizenry, the threat of military action and death - do not count as such. The corporate appropriation of public initiative and authority is unpleasantly visible in its effect on the environment, and dangerous as regards military and foreign policy. Wars are a major threat to civilised existence, and a corporate commitment to weapons procurement and use nurtures this threat. It accords legitimacy, and even heroic virtue, to devastation and death ... As the corporate interest moves to power in what was the public sector, it serves the corporate interest. It is most clearly evident in the largest such movement, that of nominally private firms into the defence establishment. From this comes a primary influence on the military budget, on foreign policy, military commitment and, ultimately, military action. War. "
If you haven't seen it already, this 49 minute documentary on the Carlyle Group is a must see, proving Galbraith's every point. [Note: the first 2 minutes are in Dutch, the rest is in English].

We know the devastation the imperial corporations have caused around the world, but what have they done for the taxpayers that supply the wherewithal for the billionaires to be billionaires in this sovietized economy? According to data from the National Bureau of Economic Research, the people are not doing too well. In fact, they are doing worse than ever when compared to the bosses:

"The top 1 percent of families earned 9.3 percent of all income in 1980. By 2000, this income share had increased to 19.6 percent. Correspondingly, the income share of the bottom 90 percent declined from 66 percent to 53.9 percent ... From 1980 to 2000, the incomes of the upper 1 percent increased 179 percent, while those of the bottom 90 percent increased by 8 percent."
The researchers conclude that:
"Because of the inequality in the United States, even though our per-capita income is higher than many countries, our low-income families are not better off than those in other places where per-capita income is lower. And even though we think of ourselves as a mobile society compared with Europe, recent research indicates that the United States has less class mobility than previously believed, nor has it changed much over the last few decades."
Obviously the senior bosses of the corporations figure into the top 1 percent of families mentioned above. The ratio of bosses' pay to that of their workers is perhaps more starkly illustrative:
"In 1970, the ratio of top executive earnings to that of the average worker was 38.6 to 1. This ratio increased to 101.1 by 1980, to 222 by 1990, and to 1046 in 1999."
For every one dollar a worker earns, his boss earns more than one thousand dollars. And it is these same bosses who have managed things so that oversight on their actions is essentially nil. As Galbraith says:
plutocrat"Power in the modern great corporation belongs to the management. The board of directors is an amiable entity, meeting with self-approval but fully subordinate to the real power of the managers. The relationship resembles that of an honorary degree recipient to a member of a university faculty. The myths of investor authority, the ritual meetings of directors and the annual stockholder meeting persist, but no mentally viable observer of the modern corporation can escape the reality. Corporate power lies with management - a bureaucracy in control of its task and its compensation. Rewards can verge on larceny."
The enemy we all face is not the occasional religious fanatic who succeeds in blowing up a bridge or even a skyscraper once every few years. No, the real enemy, the ever-present danger, is to be found in the corporate offices of America's domineering capitalists who pervert politics and the economy to their own selfish and greedy ends every single day.

July 25, 2004 in Capitalism | Permalink

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