The Corporation, Globalization, and their Pathologies and Potential

As we emerge from a long and deep economic and psychological blow to the American foundation, we find ourselves dusting off clothes, patching wounds, and clearing rubble.  The quake felt first in the board rooms of select but behemoth companies, spread in tsunami-like fashion around the globe.  This left much of the world awaiting U.S. response and recovery.  What was once a catchy term to describe corporate and free-trade trends, is now a clear reality—national economies are intertwined as one universal and global phenomenon.

A Century of Technological Advance and Economic Expansion

Let us first imagine the striking difference between one’s experiences in the 19th century versus those of the 20th. Folks living in the 20th century witnessed a civilization develop groundbreaking technologies one after the other. Nineteenth century inhabitants could barely envision machinery to cool the air, let alone conceive how to to ride a vehicle throughthe air. Successive advances in technology included a series of important communication devices that would one day shrink the world.  Almost parallel to this was the ever-strengthening of the capitalistic engine known as the American economy.  This super powerful economy drastically grew in GDP throughout the century and fueled the country’s heightened political and military might and influence.

Arguably, today’s manifestation of globalization emerged out of the industrial revolution’s successes.  But as I will remind the reader, it was through a series of important maneuvers, all connected with the American political process, which gave rise to over-sized private organizations whose reach would ultimately circle the globe. The costs have been numerous, including a stripping away of our citizen-based democracy and a species threatening ecological crisis.  The result appears to be an international corporatocracy existing without an equally powerful political body to properly supervise its agendas.

Ideally and theoretically, capitalism can and should produce improved lifestyles for the population in the way of quality products, services, and employment.  And the intended role of government is to morally and legally see that the country’s economic, social, legal, and educational systems further both the health of the economy and the welfare of its citizenry.  This is to occur in proper relation with the checks and balances built into the American political system.

Unfortunately, economics fuels politics, which can be witnessed across time, culture, and political systems.  No system—feudal, monarchal, communistic, dictatorial, city-state, or democratic—has proven this false.  Economic interests have always molded, manipulated, and circumvented the systems through which they have operated.

Balance of Power

The American debate, older only in age to the question whether or not to revolt against King George, is the question of how powerful the central government should be.  The pro-centralizing wing, represented by the Federalists, won the first battle.  Our country, however, has witnessed a continual tension between local, state, federal, and the various branches of power, as well as the private sector.  For example, Andrew Jackson, the populist and seventh US President, spent much of his political might in the 1830s fighting against what he warned would be imperial-like means to shape economic policy via the second national bank (Second Bank of the United States).  He argued that its power would be out of reach from the democratic process.

Jackson’s administration was successful in the short-term, but the President’s warnings were not heeded as centralized banking has only gained in strength, possibly proving again that the few and very elite have been able to bypass or exploit any governmental system, no matter how well designed.  Consider some of Jackson’s reasons to resist a national bank: (a) it centrally concentrates the nation’s financial strength into a single institution, (b) it exposes the government to control by foreign interests, and (c) it serves mainly to make the rich richer.

While one could argue both for and against the benefits of having a federal reserve system, it is clear that much economic policy is enacted outside the legislative process.   Also, the fact that the United States government is increasingly vulnerable to the interests of governments, like China, is irrefutable, as it continues to borrow enormous sums of foreign money.  Finally, the Reserve, in all its wisdom, failed miserably to prevent the recent series of bubbles and bursts, the latest of which nearly took down the entire national economy and devastated many others.

The Rise of the Corporation

Earlier in this country’s life, rare organizations incorporated to perform a service, such as completing a municipal project.  If the service of the corporation was completed or was no longer relevant to the interests of those it served, the corporate charter was discontinued.  As time passed and as these corporations became more common, groups of individuals took advantage of the opportunity to organize capital and expand the scope of corporate projects.  Nothing helped this more than when those representing corporate interests successfully lobbied to gain the rights constitutionally reserved for a person.

This “right” was gained via an added provision to the 14th and post civil war amendment to properly extend citizenship to freed slaves and their descendants.  The move, perceived as minor at the time, proved to be a major event that would help reshape the balance of power. The provision provided corporate collectives the ability to lobby for rights, spend unlimited amounts of money for campaigns, and maintain the right to privacy and free speech.  Greatly aided by these rights, corporations now influence elections, maintain tax havens, and successfully resist reforms that could minimize their power.

The Burden of Growth

Let us recognize what should be a glaring problem.  That is, publicly-traded corporations are burdened by their motivation to continually increase profits so their stock prices rise and appease investors and stock holders.  This scenario, which serves those who have had the power to build and further such businesses, undercuts the less destructive intentions behind healthy competition and consumerism.  When big business requires continued profits to increasingly produce an inflow of money to the investors and bloat salaries and bonuses, a binding incentive builds.

The incentive naturally produces self-survival decisions and an emphasis on short-term gains.  The corporate locomotive is also tempted to influence legislation that keeps the machinery unclogged, unfettered, and unchecked.  The agenda to increase size has also fostered a drive to keep corporate pathologies and closed-door maneuvers unseen to best minimize public concern.  Meanwhile, the federal reserve system, often criticized for lacking transparency, typically works in tandem with the locomotive to ensure the health of the stock market and the corporate agenda.

Imbalances of Power and Priority

Our country’s formation began with a painstaking process to prevent abuses of power.  We now witness nearly obscene imbalances.  This appears most obvious when examining loophole exploitation of campaign financing and lobbying.  The lobby system originated as part of the first amendment’s right to free speech so that voices of special interests would be heard.  A democracy, based on majority rule, could naturally overshadow the needs of certain groups.

Time has elapsed, however, and this system has morphed into what some legitimately describe as legalized bribery.  Certain super powerful interests groups spend unGodly sums to finance candidates at all levels and on both sides of legislative floors.  It is safe to say that these groups–such as the pharmaceutical, oil, auto, defense contracting, tobacco, and media industries–cannot be considered disenfranchised and therefore in need of special provision to be heard.

Let us also consider the role of the military.  It existed primarily as a defensive requirement during the country’s formative years when America was relatively weak and vulnerable to various powers around its borders.  But soon the United States began its expansion that has yet to abate.  Expansion has required an ever-strengthening military to ensure imperial growth.  The country particularly flexed its brute throughout the twentieth century, acquiring lands and building bases.  It became a legitimate superpower after World War II and quickly became embroiled in an arms race for decades with the Soviet Union.  Various presidential administrations exercised executive will around the world, often-times without legislative backing.

The Cold War, pragmatically and politically, appeared to be an ideological battle between capitalistic consumerism versus a warped brand of socialism.  The United States has fervently preached the values of freedom, liberal democracy, and the rule of law since its conception.  The U.S., however, has backed extreme dictatorships that often have been cruel to its people.  Support was offered to such governments as long as they supported US trade interests and were in alignment against US enemies (against the Soviet Union during the Cold War, for example).

As oil became increasingly important as an economic commodity after World War II, the United States became more involved in Middle Eastern affairs.  The only major consistency found in U.S. foreign intervention has been the intention to maintain or expand the kind of security that allows for economic power and growth.  Such policy is often sold to the public through the preaching of freedom and the preying on fear.  Rarely has America dramatically intervened militarily in a significant regional crisis primarily to help alleviate injustice.

The priority to strengthen the military has helped produce a heavy tax burden and now insufficient funding for what really matters to the population, such as education, health care, and ecological sustainability.  And under the corporatocracy, even well-intended presidents and congressman have been impotent.  Meanwhile, many U.S. states have been suffering from fiscal dysfunction for decades. Consider the following and intertwined practices of the American Corporatocracy:

(a)    We witness a co-dependent marriage or legalized collusion between the private and public sectors.  Common is the “revolving door” practice that sees influential people of power flipping from side to side to further corporate and military interests.  Former Vice President Dick Cheney possibly serves as the best ‘worst example’ of this.  Cheney had a long and powerful public service life, including Chief of Staff in the Ford administration, before serving for five years as CEO of Halliburton, the world’s second largest oilfields services corporation.  He stepped down from Halliburton in 2000 and earned $36 million in severance and stock options.  Soon after and as Vice President, Cheney served as a major proponent, planner, and executor of the Iraq war, during which his former corporation allegedly received unlawful special treatment for projects in Iraq, Kuwait, and the Balkans.

(b)   Corporations have the incentive to take advantage of third world labor and have avoided responsible adaptations, in part through successful lobbying (e.g., not investing in cleaner technologies).

(c)    Many corporations intentionally make products designed not to last to ensure increased and ongoing sales.

Conditioning through Mass Media

Many witness the cycle of operation, described above, as modern imperialism, which is considerably more subtle than practices during past eras.  This brand of empire often relies on conditioning of the public through mass media and a culture of marketing and public relations.  Education and the media have been highly influenced by corporate interests.  Once independently operated, newspapers and their television counterparts are mostly owned by corporations.  As a result, investigative reporting has shrunk to a fraction of what passes as today’s news.

This helps the corporate world keep dissenting opinion at bay and flies in the face of the American Republic’s original vision and built-in freedoms.  And because powerful interests have best funneled their influence through the strengthening of the private sector, they have molded conservative ideology under the banner: big government is bad and takes away from the common citizen.  Ironically, conservative administrations, most notably Reagan and Bush II, have bloated government spending and national debt by beefing up military action and providing tax relief to the wealthy and corporations.

Meanwhile, we do not even require that advertising, much less news, be truthful. Truth, research, science, and education are often swept under the rug as the public is left in a state of confusion, inaction, and powerlessness.  This atmosphere is extremely unhealthy for a real democracy, as well as binding to the health and wellness of both domestic responsibilities and international relations.

Actions from past “superpowers” were a bit more obvious and brutal.  The conquering of neighboring lands for precious resources and greater power was relatively common. The subtle but strong imperialism of the West, with its desire to use a vast majority of the world’s resources, has been highly successful in the game of power brokering.  Because of its subtle nature, it is much easier to deceive the public and keep up the appearance of benevolence. American imperialism, however, has not helped much in the way of alleviating the huge disparity between wealth and poverty and has created a whopping level of waste and pollution.

I believe, however, that this hierarchical arrangement, with a relatively small number of very wealthy and powerful people at the top, is weakening.  If so, what then is in its wake?  Is there reason to believe that our now global family can rise to the vast challenges of the day?  I explore some of the variables contributing to structural change, as well as some positive potential for  globalization, in Part II of this series.