Progressive Ponderings: Are Corporations Governable? Part 2

by Joe Mayer

Unregulated Capitalism

When I was studying economics in the mid-1950s, capitalism was called, of all things, capitalism. As it gradually began to dominate the elements of production – land (resources), labor, capital, and management – its methods of business spawned the Robber Barons and greater class distinction. The gilded age, which showered gold on few capitalists, was followed by the great depression, drowning the masses in misery and casting doubts on capitalism’s ability to serve the needs of the people. Capitalists were willing to surrender their name but not their power and money, so capitalism began its rhetorical decline in favor of "free-market economy."

Reframing capitalism into free-market economy was ingenious. Appropriating the root word of freedom, people are automatically warmed by its possibilities. So, in people’s minds, limiting or "regulating" this freedom becomes an invasion of personal freedom. Citizens, not realizing that the freedom of capitalism frequently infringes on personal freedom, willingly defend corporate encroachment to their own impoverishment.

Another misuse of the root word of freedom is in modifying trade – free trade. It has a warm, fuzzy sound. How could anyone oppose it? Under this freedom the corporate world has established a system in which goods and money can travel freely while humans are often severely restricted in crossing borders. Corporations, being a capital good, can locate in multiple jurisdictions simultaneously. Free-trade agreements basically undermine the ability of any government to regulate these multinational conglomerates. The whole apparatus of free trade agreements, the World Trade Organization, the World Bank, the International Monetary Fund (IMF) is designed to keep national sovereignty from interfering with corporate transgressions. Most free trade agreements severely limit the rights of governments to protect their own citizen workers and their own natural resources. National governments that do not comply face stiff penalties enforced by the World Trade Organization. This is government brought to you by corporate aristocracies. They’ve engineered a network of legal complexities, usurping governments’ rights to regulate their own international activities and frequently their domestic activities.

Corporations often use nationalism and patriotism as underlying themes in their literature, promotions, and advertising. At the same time they pressure, lobby, and scheme to advance tax exemptions, tax rates, and tax credits favorable to themselves so that now most major U.S. corporations pay no federal income taxes. When they are not completely successful, they create shell corporations in foreign countries; an office space and a mailing address is enough to enable them to avoid or evade U.S. taxes. Some have gone so far as to incorporate in small tax-haven countries. After behaving in this unpatriotic manner, they continue to lobby politicians for favorable legislation and to demand priority in receiving Federal Government contracts.

Corporate patriotism – the term seems odd to me that an object, a human creation, could have an emotion such as love (of one’s country) – should also be questioned in their practice of shipping our jobs to other countries. This off-shoring of jobs is probably the single largest factor in creating unemployment and in weakening the organized labor movement in the United States. High unemployment is a consistent objective of corporate capitalism. It creates fear in the working class and keeps them in line, obedient, unorganized, and even grateful for their puny wages.

(For "Are Corporations Governable? Part 1" go here.)

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