Corporate Control Of
Society And Human Life
By Stephen Lendman
25 April, 2006
transnational corporations are clearly the dominant institution of our
time. They're preeminent throughout the world but especially in the
Global North and its epicenter in the US. They control or greatly influence
what we eat and drink, where we live, what we wear, how we get most
of our essential services like health care and even what we're taught
in schools up to the highest levels. They create and control our sources
of information and greatly influence how we think and our view of the
world and them. They even now own patents on our genetic code, the most
basic elements of human life, and are likely planning to manipulate
and control them as just another commodity to exploit for profit in
their brave new world that should concern everyone. They also carefully
craft their image and use catchy slogans to convince us of their benefit
to society and the world, like: "better things for better living
through chemistry" (if you don't mind toxic air, water and soil),
"we bring good things to life" for them, not us), and "all
the news that's fit to print" (only if you love state and corporate
friendly disinformation and propaganda). The slogans are clever, but
the truth is ugly.
Corporations also decide
who will govern and how. We may think we do, but it's not so and never
was. Those national elections, especially the last two, only looked
legitimate to most people, but not to those who know and understand
how the system works. Here's how it really works. The "power elite"
or privileged class C. Wright Mills wrote about 50 years ago in his
classic book by that title are the real king and decision makers. He
wrote how corporate, government and military elites formed a trinity
of power after WW II and that the "power elite" were those
"who decide whatever is decided" of importance. The holy trinity
Mills wrote about still exists but today in the shape of a triangle
with the transnational giants clearly on top and government, the military
and all other institutions of importance there to serve their interests.
These corporations have become so large and dominant they run our lives
and the world, and in a zero sum world and the chips that count most
in their stack, they do it fortheir continuing gain and at our increasing
expense. Something is way out of whack, and in this essay I'll try to
explain what it is and why we better understand it.
The Power of Transnational
and the Harm They Cause
As corporations have grown
in size they've gained in power and influence. And so has the harm they
cause - to communities, nations, the great majority of the public and
the planet. Today corporate giants decide who governs and how, who serves
on our courts, what laws are enacted and even whether and when wars
are fought, against whom and for what purpose or gain. It's for their
gain, who else's, certainly not ours. Once we start one, they can even
make profit projections from it like on any other business venture.
For them, that's all it is - another way to make a buck, lots of them.
The central thesis of this
essay is that giant transnational corporations today have become so
dominant they now control our lives and the world, and they exploit
both fully and ruthlessly. While they claim to be serving us and bringing
us the fruits of the so-called "free market," in fact, they
just use us for their gain. They've deceived us and highjacked the government
to serve them as subservient proxies in their unending pursuit to dominate
the world's markets, resources, cheap labor abroad and our own right
here. And they've done it much like what happens in the marketplace
when a predator company attempts to take control of another one that
prefers to remain independent. They launch a hostile takeover, going
around or over the heads of the target's management, their employees
and the communities they operate in. They go right to the target's shareholders
and promise them a better deal, meaning a premium price on the stock
They do this, as in a friendly
merger, for a variety of financial and strategic reasons, but essentially
it's to achieve any possible immediate gain as well as over the longer
term greater market dominance that will build future profits. But what
happens in the wake of a takeover. Assets get stripped, spun-off and/or
sold-off. Plants are closed. Jobs are lost. And all this is done for
the primary bottom line goal - "the bottom line," higher profits,
whatever the cost to people, communities or society.
Think of it this way. Large
corporations today everywhere, but especially the largest ones in the
Global North, are a destructive force, hostile to people, societies
and the environment. They're nothing less than legal private tyrannies
operating freely with virtually no restraint. Everything for them, animal,
vegetable or mineral, is viewed as a production input to be commodified
and consumed for profit and then discarded when no longer of use. And
to achieve maximum profits, costs must be rigidly controlled. That means
the lowest prices paid for goods and services, the lowest wages paid
to workers (below privileged higher management who reward themselves
richly), as little as possible spent on essential benefits like health
care and pensions, and increasingly little or no concern about the long-term
cost of exploiting, plundering or even destroying the natural environment
and the future ability of the planet to sustain life. These issues,
however recognized and grave, are for someone else to deal wih later.
For now all that matters
is today, the next quarter's earnings and keeping the stockholders and
Wall Street happy. They only understand numbers on financial statements
and are blind, unconcerned and even hostile to human and societal welfare
or a safe environment that will protect and sustain all life forms.
They call it "free market capitalism." It's really the law
of the jungle. They're the predators, we're the prey, and every day
they eat us alive.
Does all this make sense?
And do corporate chieftains who live in a community, love their wives
and children, contribute to charities, attend church and believe in
its teachings really go to work every day and think - "who and
what can I exploit today?" They sure do because they have no other
choice. No more so than breathing in and breathing out.
How the Law Affects
Publicly owned corporations
are mandated by law to serve only the interests of their shareholders
and do it by working to maximize the value of their equity holdings
by increasing profits. That's it. Case closed. Think of these businesses
as gated communities of owners (large and small), the welfare of whom
is all that matters and the world outside the gates is to be used and
exploited for that one purpose only. Forget about any social responsibility
or safeguarding the environment. The idea is to grow sales, keep costs
low, increase profits, and if you do it well, shareholder value will
rise, the owners and Wall Street will be happy, and you as a CEO or
senior executive will probably get a raise, good bonus and keep your
job. Try being worker-friendly, a nice guy, a good citizen or a friend
of the earth and fail to achieve the above objectives and you'll likely
face dismissal and even possible shareholder lawsuit for not pursuing
your fiduciary responsibility. Anyone choosing this line of work has
n other choice. To do the job well, you have to think only of the care
and feeding of your shareholders and the investment community, ignore
the law if that's what it takes to do it, and obey the only law that
counts - the one that helps you grow the "bottom line."
There's nothing in the Constitution,
which is public law, that gives corporations the rights they've gotten.
It never mattered to them. They just crafted their own private law,
piece by piece, over many years with the help of corporate-friendly
lawyers, legislators and the courts. And today it's easier than ever
with both major parties strongly pro-business and the courts stacked
with business-friendly judges ready to do their bidding. The result
is big business is now the paymaster, or puppetmaster, with government
and the halls of justice their faithful servants. There's no government
of, for and by the people, no public sovereignty, no democratic rights
or any choices but to accept their authority and bow to their will.
It's a democracy for the few alone - the privileged elite. Our only
choice is to go along to get along or get out of their way.
A Profile of the
World's Largest 200
In December, 2000 The Institute
for Policy Studies released a report called "The Rise of Corporate
Global Power." It was a profile of the 200 largest transnationals
that showed just how dominant they are. A summary of their findings
is listed below.
1. Of the world's 100 largest
economies, 51 are corporations.
2. The combined sales of
these 200 corporations (called "The Group" below) in 1999
equalled 27.5% of world Gross Domestic Product (GDP) and are growing
faster than overall global economic activity.
3. The Group's combined sales
exceed the total combined economies of all nations in the world except
the largest 10.
4. The Group's combined sales
are 18 times the income of the bottom one fourth of the world's population
(1.2 billion people) living in "severe" poverty.
5. Despite their combined
size and percentage of world economic activity, The Group employs only
0.78% of the world's workforce.
6. From 1983 to 1999 The
Group's workforce grew only 14.4% while their profits increased by 362.4%
or about 25 times as much.
7. The largest employer in
the world, Walmart, employed 1,140,000 in 1999 (1.6 million in 2005)
or 5% of The Group's total employment. It's also a model (and increasingly
a target) for corporate union-busting, widespread use of part-time workers
and a practice of avoiding giving its workers needed benefits like health
8. 82 US corporations are
in The Group, twice as many as Japan with 41, the next highest contributing
9. 44 of the US corporations
in The Group didn't pay the full 35% federal tax rate from 1996 - 1998.
7 of them paid no tax in 1998 and also got tax rebates, including Enron
and Worldcom now exposed as corporate criminals.
10. The percent of The Group's
sales from the service sector (not manufacturing) grew from 33.8% in
1983 to 46.7% in 1999. In the US, the service sector comprised 79% of
the total economy in 2004.
How Corporate Behavior
Affects the Public Interest
Big corporations have almost
always thrived in the US. But a crucial, defining moment happened in
1886 when the Supreme Court granted corporations the legal status of
personhood in Santa Clara County v. Southern Pacific Railway - a simple
tax dispute case unrelated to the issue of corporate personhood. Incredibly
it wasn't the Justices who decided corporations are persons, but the
Court's reporter (J.C. Bancroft Davis) who after the decision was rendered
wrote it in his "headnotes." The Court did nothing to refute
them, likely by intent, and the result was corporations got what they
had long coveted.
That decision granted corporations
the same constitutional rights as people, but because of their limited
liability status, protected shareholders from the obligations of their
debts, other obligations, and many of the responsibilities individuals
legally have. Armed with this new legal status corporations were able
to win many additional favorable court decisions up to the present.
They also gained much regulatory relief and favorable legislation while,
at the same time, being protected by their limited liability status.
As a result, corporations have been able to increase their power and
grow to their present size and dominance.
Although corporations aren't
human, they can live forever, change their identity, reside in many
places simultaneously in many countries, can't be imprisoned for wrongdoing
and can change themselves into new persons at will for any reason. They
have the same rights and protections as people under the Bill of Rights
but not the responsibilities. From that right, corporations became unbound,
free to grow and gain immense power and be able to become the dominant
institution that now runs the country, the world and all our lives.
Most important, they got an unwritten license from all three branches
of the government to operate freely for their own benefit and others
of their privileged class and do it at the public expense everywhere.
They've exploited it fully as they're grown in size and dominance, and
the result has been lives destroyed, the environment harmed and needless
wars fought on their behalf because they open markets and grow profits.
It's no exaggeration to say these institutions today are rea "weapons
of mass destruction."
In the early days of the
republic it all might have been different had Thomas Jefferson and James
Madison prevailed over Federalists John Adams and Alexander Hamilton.
Jefferson and Madison believed the Bill of Rights should include "freedom
from monopolies in commerce" (what are now giant corporations)
and "freedom from a permanent military" or standing armies.
Adams and Hamilton felt otherwise, and the final compromise was the
first 10 Bill of Rights amendments that are now the law but not the
other two Jefferson and Madison wanted included. Try to imagine what
this country might be like today had we gotten them all.
We didn't, of course, so
the result, as they say, is history. It allowed small corporations to
grow into giants and so-called "free market capitalism" to
become the dominant state religion of this country and the West. We
may say it's free, but it only is for those own and control it, and
notice we never hear the system called "fair." That's because
in most key industries a handful of corporate giants dominate and now
work in cartel-like alliance with their "friendly" competitors
here and abroad to control (read: exploit) the markets they serve. They're
also able to co-opt the leaders and business elites of countries in
the developing world, or work in partnership with them in the larger
ones like China, India and Brazil, to allow them market entry. As an
inducement, they offer to invest their capital and offer their technology
in return for a business-friendly climate and access to the host country's
cheap labor. It's an alliance based on pure exploitation for profit
at the expense of people who are sed, abused and discarded when they
have no further value.
This essay is mainly about
how these same corporate giants dominate and exploit here in the US.
They can't get away with the flagrant abuses commonplace in sweatshop
labor countries, but they're moving in that direction. It's no longer
like the past in this country when I was young and beginning my working
life (a distant memory of better times) when manufacturing was strong,
jobs paid well and had good benefits, and workers were protected by
strong unions that served their interests even while partnering with
management and willing to do the bidding of government.
I still remember well an
incident early in my working life when as a newly minted MBA I worked
as a marketing research analyst for several large corporations prior
to joining a small family business. At one of those companies in the
early 60s, my boss called me into his office on my first day on the
job. He jokingly told me he was so happy with my work he was giving
me a raise. We both chuckled, and he then explained on that day everyone
in the company got an inflation-based increase. It was automatic from
the lowliest worker to top management because the unions (then strong)
got it written into their labor contract. In that company, everyone
got the same benefits as union members. Try finding anything like that
today even for union members alone. It's almost unheard of.
Today, the country is primarily
dominated by service industries many of which require little formal
education, only pay low wages and few if any benefits, and offer few
chances for advancement. The US Department of Labor projects that job
categories with the greatest expected future growth are cashiers, waiters
and waitresses, janitors and retail clerks. These and other low wage,
low benefit jobs are what many young people entering the workforce can
look forward to today. You don't need a Harvard degree for them or even
one from a junior college - and for the ones listed above, no degree
is needed, not even a high school one.
The continuing decline of
good job opportunities is a key reason why the quality of education
in urban schools has deteriorated so much in recent years and school
dropout rates are so high. In my city of Chicago, half of all students
entering high school never graduate and of those who do 74% of them
must take remedial English and 94% remedial math at the Chicago City
Colleges according to a report published in the Chicago Sun Times. The
situation isn't much better in inner cities throughout the country,
nor is the level of racial segregation that's grown to levels last seen
in the 1960s according to Jonathan Kozol in his new book The Shame of
the Nation. Again in Chicago, a shocking 87% of public school enrollment
was black or Hispanic, and the situation is about as bad or even worse
in most other big cities.
The lack of good job opportunities
for a growing population of ill-prepared young people is also a major
reason for the growth of our prison population that now exceeds 2.1
million, is the largest in the world even ahead of China with over four
times our population, and is incarcerating about 900 new prisoners every
week. I wrote a recent heavily documented article about this called
The US Gulag Prison System.
The US Has Always
Been the Unthinkable
and Unmentionable - A Rigid Class Society
The US has always been what
the "power elite" never admit or discuss - a rigid class society.
But once there was a thriving middle class along with a small minority
of rich and well-off and a large segment of low paid workers and the
poor. That majority in the middle could afford their own homes, send
their kids to college and afford many amenities like new cars, some
travel, convenience appliances and decent health care. I can still remember
buying a health insurance plan while finishing my graduate work in 1959
that cost about $100 and change total for respectable coverage for a
full year. Honest, I'm not kidding.
Fewer people each year can
afford these "luxuries" now, including decent health care
coverage, because of the hollowing out of the economy, stagnant wage
growth (to be discussed below) and skyrocketing costs of essentials
like health insurance, prescription drugs and college tuition for those
wanting a higher education. Services now account for nearly 80% of all
business while manufacturing has declined to about 14%, and total manufacturing
employment is half the percentage of total employment it was 40 years
ago and falling. Also, financial services of all types now comprise
the largest single sector of the economy at 21% of it. But most of it
involves investment and speculation running into the hundreds of trillions
of dollars annually worldwide (and the US is the epicenter of it all)
just for transactions involving currencies and so-called over-the-counter
and exchange-traded financial derivatives. It's not the purpose of this
essay to explain the nuts and bolts of this kind of trading except to
say hey produce nothing anyone can go in a store and buy or that enhance
the well-being of the majority public that doesn't even know, let alone
understand, that this kind of activity goes on or what the inherent
dangers from it may be.
The dismantling of our manufacturing
base, however, is a subject that should make daily headlines but is
seldom discussed in the mainstream. It's crucially important because
one has to wonder how any nation can avoid eventual decline when it
allows its manufacturing to be done abroad, reduces its need for a highly
trained work force and ends up destroying its middle class that made
it prosper in the first place. There are distinguished thinkers who
believe as I do that the US has seen its better days and is now in a
downward trajectory economically. Unless a way is found to reverse this
destructive trend, the US will be Number One only in military spending
and waging wars. And no nation in history based on militarism and conquest
has ever not failed ultimately to destroy itself.
I'd like to quote two distinguished
thinkers who've addressed the issue of growing inequality in the US.
On most social matters they'd likely disagree, but not on this one.
One was former liberal Supreme Court Justice Louis D. Brandeis who explained:
"We can have democracy in this country, or we can have great wealth
concentrated in the hands of the few, but we can't have both."
The other was distinguished "free market" economist and Nobel
laureate Milton Friedman. In his view: "The greatest problem facing
our country is the breaking down into two classes, those who have and
those who have not. The growing differences between the incomes of the
skilled and the less skilled, the educated and the uneducated, pose
a very real danger. If that widening rift continues, we're going to
be in terrible trouble.....We cannot remain a democratic, open society
that is divided into two classes."
The Downward Trajectory
of American Workers
Over the past generation
working people have seen an unprecedented fall in their standard of
living. In the past (except for periods of economic downturn), workers
saw their wages and benefits grow each year and their living standards
improve. Today it's just the opposite. Adjusted for inflation, the average
working person in the US earns less than 30 years ago, and even with
modest annual increases is not keeping up with inflation. In addition,
the federal minimum wage is a paltry $5.15 an hour and was last increased
in 1997. That rate is now at the lowest point it's been relative to
average wages since 1949. It's incentivized individual states to raise
their own which they have the right to do, and, as of mid-year 2005,
17 of them and the District of Columbia have done it covering nearly
half the US population. That helps, but not enough.
Some of the world data is
especially shocking, appalling and indicative of the economic trend
in the US. According to the UN 2002 Human Development Report, the richest
1% in 1999-2000 received as much income as the bottom 57% combined,
over 45% of the world's population lived then on less than $2 a day,
about 40% had no sanitation services and about 840 million people were
malnourished. In addition, 1 in 6 grade school children were not in
school, and half the global nonagricultural labor force was either unemployed
or underemployed. Most shocking and disturbing of all is that many millions
(likely tens of millions) of people in the less developed world die
each year from starvation and treatable diseases because of abuse and/or
neglect by rich nations that could prevent it. And these numbers reflect
the state of things at the end of a decade of overall impressive economic
growth. But it shows how those gains went mainly to a privileged upper
class who got them at the expense of the majority below them especially
the most desperate and needy.
The same trend is evident
in the US although not as stark as in the less developed world. Except
for the mild recession in 2001-2002, overall US economic growth for
the past 15 years has been strong and worker productivity high. But
the gains from it went to the privileged at the top and were gotten
at the expense of working people who saw their wages fail to keep up
with inflation and their essential benefits decline. In 2004 the average
CEO earned 431 times the income of the average working person. That
was up from 85 times in 1990 and 42 times in 1980. It's hard to believe
and even harder with the real life example below.
I'd like to nominate a "poster
executive" who for me symbolizes classic gross corporate excess
and greed. He's the chairman and CEO of Capital One Financial, the giant
credit card company that's awaiting the finalizing of its acquisition
of North Fork Bancorp. At completion of this deal, the Wall Street Journal
reported on March 24 this lucky fellow will realize a gain of $249.3
million from stock options he exercised last year. That's in addition
to the $56 million he earned in 2004. What on earth will he spend it
on, and how many less fortunate ones will have to ante up to pay for
this in the de rigueur job cuts that always follow big acquisitions.
And what will all those other
lucky CEOs and top executives spend theirs on as well. If you're not
already gagging, let me make you choke. According to a study just released
by two Ivy League academics based on interviews with CEOs and top managers
of the largest 1,500 public US companies, the top five executives collectively
at those companies pocketed $122 billion in compensation from 1999-2003
plus at least $60 billion more in supplemental benefits from SERPs (Supplemental
Executive Retirement Plans). Also, other data show average annual CEO
pay rose from about $1 million a year in 1980 to an estimated $14.4
million in 2001 and rising - plus all those juicy benefits. I repeat
- what on earth can they spend it on. They could never even count it.
Reasons for This
Unabated Downward Trajectory
The reasons for this decline
were as follows:
The shift away from manufacturing
The growth of so-called "globalization"
sending many jobs abroad including high-paying ones.
The decline of unions to
levels last seen before the mass unionization struggles of the 1930s
because of government and corporate antipathy toward them and corporations
using the threat to close plants and move jobs offshore to force workers
to take pay cuts and accept lower benefits. And then they still move
Deregulation of key industries
including transportation, communications and finance, which opened these
industries to low cost competition that put pressure on unions and forced
workers to accept lower pay and benefits to keep their jobs.
The growth of high technology
allowing machines (mainly computers) to do the work of people, thus
reducing the need for them.
The effects of racism and
sexism (in a society with deep-rooted racism, sexism and classism) as
seen in the data showing 30% of black workers and 40% of Latino workers
earning poverty wages with women in both categories most affected. And
the average black family owns only 14% as much as the average white
The unabated downward trajectory
of workers' real income already discussed. The only family income gains
have come from two income households, in many cases because wives were
forced to enter the workforce out of necessity.
Hot off the press from the
latest US Federal Reserve triennial survey (and most comprehensive one
of all) of household wealth published in late February, 2006:
--Median American family
income grew a paltry 1.5% after inflation between 2001 and 2004, but
there was a widening gap between upper and lower income households.
--While the richest 10% rose
an inflation adjusted 6.5%, the bottom 25% fell 1.5%.
--Stephen Brobeck, Executive
Director of the Consumer Federation of America, explained - "While
the typical American household basically ran in place, less affluent
households actually lost ground."
Even hotter off the press,
the US Department of Labor and Congressional Budget Office reported
in late March that in the last 5 years ending year-end 2005, inflation
adjusted GDP per person rose 8.4% but the average weekly wage fell 0.3%.
Following a long-term trend since the 1970s, those in the upper income
percentiles gained the most while those in the lower half of them lost
the most. And the income gap between rich and poor continued to widen.
--The racial disparity was
especially dramatic. The median white family's net worth in 2004 was
$140,700 compared with $24,800 for the typical nonwhite family.
According to the 2005 Federal
Poverty Guidelines, 12.7%, or 37 million people, lived in poverty in
2004. However, because of an acknowledged flawed model to measure poverty,
the true number is far higher - at least many millions more and increasing
even in times of prosperity.
In December, 2004 the New
York Times reported the US ranked 49th in world literacy, and the US
Department of Labor estimates over 20% of the population is functionally
illiterate (compared to about 1% in Venezuela and Cuba, two of the countries
we demonize the most). It's also true, as discussed above briefly, that
the quality of public education has been in decline in urban schools
for many years. In addition (also mentioned), the extent of racial segregation
is now as great as in the 1960s, despite supposed but unrealized gains
from the civil rights legislation of that time. Further, state and local
education budgets aren't keeping up with a growing need or are being
cut. It's also no better for those needing college aid as federal Pell
grants have been frozen or cut for three straight years, and it was
just reported in late March by public college finance officials that
state higher education funding has fallen sharply from $7,121 per student
in 2001 to $5,833 in 2005. It means a growing number of lwer income
students are now deprived of a chance for higher education - and it's
getting steadily worse.
The World Health Organization
ranked the US 37th in the world in "overall health performance"
and 54th in the fairness of health care. And in 2004 about 46 million
people had no health insurance and millions more were underinsured.
These appalling numbers are in spite of the fact that the US spends
far more on health care per capita than any other country. And all developed
countries in the world, except the US and South Africa, provide free
health care for all its citizens paid for through taxes.
The European Dream reported
US childhood poverty ranked 22nd or second to last among developed nations.
The US ranked last among
the world's 20 most developed nations in its worker compensation growth
rate in the 1980s with conditions only slightly better in the 1990s.
The New York Times reported
12 million American families, over 10% of all households, struggle to
The NYT also reported the
US ranks 41st in world infant mortality.
All this and many more depressing
statistics are happening in the richest country in the world with a
2005 Gross Domestic Product of $12.5 trillion.
The dramatic effects of social
inequality in the US are seen in the Economic Policy Institute's 2004
report on the State of Working America." It shows the top 1% controls
more than one-third of the nation's wealth while the bottom 80% have
16%. Even worse, the top 20% holds 84% of all wealth while the poorest
20% are in debt and owe more than they own.
Corporate Gain Has
Come at the Cost of Worker Loss
Not coincidentally, as workers
have seen their living standards decline, transnational corporations
have experienced unprecedented growth and dominance. And that trend
continues unabated. How and why is this happening? Begin with the most
business-friendly governments the country has had over the last 25 years
since the "roaring" 1920s when President Calvin Coolidge explained
that "the business of America is business." He, and two other
Republican presidents then did everything they could to help their business
friends. But they were small-timers compared to today, and the size,
dominance and global reach of big business then was a small fraction
of what it is now. And back then, job "outsourcing", GATT
and WTO type trade agreements, and the concept of globalization weren't
in the vocabulary. Now they're central to the problem as they've put
working people in corporate straightjackets and created a severe class
divide in the country (not to mention the developing world where it's
far worse) that keep widening.
How World Trade Agreements
Destroy Good Jobs
and the American Dream
World trade between nations
is nothing new, and the General Agreement on Tariffs and Trade (GATT)
has been around since it was formed in Havana, Cuba in 1948. But with
the signing of NAFTA that went into effect on January 1, 1994, the notion
of so-called globalization emerged big time. NAFTA brought Mexico into
the 1989 Canada-US Free Trade Agreement as part of a radical experiment
to merge three disparate economies into a binding one-size-fits-all
set of rules all three had to abide by regardless of the effect on their
people. To sell it to each country's legislators and people, NAFTA's
backers made lofty pie-in-the-sky predictions of new jobs that "free
trade" would create. They never were nor was this a plan to do
it. It was a scam to outsource jobs and thus eliminate many others,
enrich the transnationals and make working people pick up the tab and
take the pain.
NAFTA was just the beginning.
It was planned as a stalking horse and template for the World Trade
Organization (WTO), that replaced the GATT one year after NAFTA went
into effect. The WTO along with an alphabet soup of trade agreements
(passed and wished for) like GATS (covering all kinds of services),
TRIPS (for intellectual property), MAI (on investments and most all-encompassisng
and dangerous one of all if it ever passes even in separate pieces)
and all the regional agreements like CAFTA and FTAA are intended to
establish a supranational economic "constitution." It's to
be based on the rules of trade the Global North nations want to craft
that would override the sovereignty of all WTO member nations. In other
words, the plan was and still is for the US primarily, along with the
EU, Japan and other dominant Global North countries to establish a binding
set of trade rules (a global constitution) they would write for their
benefit for an integrated world economy and then force all other nations
to abideby them. NAFTA, and what was to follow, were and are not intended
to create jobs and raise living standards in the participating countries,
despite all the hype saying they would and will. These agreements are
solely plans to benefit big corporations, legally allowing them the
right to dominate world markets, override national sovereignty to do
it, and exploit people everywhere for their gain. Bottom line - these
"agreements" mean big corporations win and people everywhere
So far the jury is very much
out on whether the grand plan will succeed as key countries in the Global
South have caught on to the scam and aren't buying it - Brazil, India,
Venezuela, Argentina, Bolivia and others. And China is big enough to
be a club member, agree to the rules, and then bend them at times to
protect its own interests.
But if NAFTA was a template
to disguise a WTO attempted world "hostile takeover," look
at all the carnage it's created so far. Instead of creating jobs in
all three countries, it destroyed hundreds of thousands of them. In
the US alone it's responsible for the loss each year of many thousands
of high paying, good benefit manufacturing jobs now exported to low
wage countries like Mexico, China, India and many others. And most of
the workers losing them only are able to find lower paying ones with
fewer or no benefits if they can find any job at all. This is an ongoing
problem in good as well as poor economic times and gets worse every
year. It's also led many older workers, who wish to work but can't find
jobs, to drop out of the work force or take lower paying part-time ones
when they can find full-time ones.
The result has been a huge
shift upward in income, wealth and power in the US (and in Canada, Mexico
and all other WTO member countries) benefitting the business elites
and corrupted politicians. And it's cost working people billions of
dollars, many thousands of good jobs and a permanent drop in the average
American worker's standard of living. It's also created an enormous
migration problem all over the world comprised of desperate people looking
for work because there's none at home. I wrote at length about this
in the US in my recent article called The War on Immigrants. The problem
gets worse every year including in the US. And here a low unemployment
rate hides the fact that many workers have dropped out of the work force
or must take whatever part-time jobs they can find because they can't
get full-time ones as mentioned above.
I'm now working on a new
article in which I discuss the view of some US economists who explain
that if the unemployment rate today was calculated the same way it was
during The Great Depression when it rose to a peak of 25% of the working
population, the true current figure would be about 12% instead of the
reported 4.7%. The current calculation method includes part-time workers
who work as little as one hour during the reporting period. It also
excludes discouraged workers who wish to work but who've stopped looking
because they can't find jobs.
One might logically wonder
why big US corporations run by smart people wouldn't be trying to ameliorate
this problem to build rather than weaken the purchasing power of people
in their home country - the ones they need to buy their products and
services. It's not just for their obvious need to control or reduce
costs to enhance profits. It's because these companies are only nominally
US ones. They may be headquartered here, but they could as easily be
home based anywhere. The US may be their biggest market and most important
source of revenue and profit, but their operations and markets span
the globe. If they desired, they could pick up and leave and set up
shop in Timbuktu or Kathmandu. That's why they're called "transnationals."
Once Our Government
Protected Working People
At one time US governments
had a social contract with its citizens, imperfect as it was. Most governments
in Western Europe still do, although they're being weakened. But since
the 1980s and especially after the election of George W. Bush, that
contract here is being dissmantled, program by program, year after year
with the ultimate goal of making every one self-sufficient with little
or no safety net for protection. The most vulnerable poor are hurt most
and their numbers grow each year, but the middle class is suffering
too as those in it are declining as a percent of the total population.
And the very definition of a middle class is changing as the wealth
gap keeps widening between top and bottom along with the hollowing out
of the middle.
Bush and his cabal of acolytes
are so intent on destroying the US social contract with its citizens
that their motto might as well be: you can have anything you want -
as long as you can afford to pay for it. If not, you're on your own.
The Balance Sheet
Documenting Corporate Gains
Worker loss has been corporations'
gain - big time. In 2004 the world's largest 500 corporations posted
their highest ever revenues and profits - an astonishing $14.9 trillion
in revenue and $731.2 billion in profits. And top corporate officials,
mainly in the US, are raking it in, rewarding themselves with obscene
amounts of salaries, bonuses in the multi-millions and lucrative stock
options worth even more for many of them. That level of largesse is
only possible at the expense of working people here and everywhere.
Oliver Stone may have been thinking of them when he made his 1980s film,
Wall Street. In it was the memorable line spoken by the character portraying
the manipulative investor/deal-maker when he explained that "greed
Except for two brief and
mild recessions, corporations in the US have prospered since the 1980s
in a very business-friendly environment under both Democrats and Republicans.
The result has been rising profits to record levels, enhanced even more
by generous corporate tax cuts (and personal ones as well mostly for
the rich), especially after the election of George Bush. Under this
president, one of their own in the White House, US corporations have
never had it better. It's been so good that 82 of the largest 275 companies
paid no federal income tax in at least one year from 2001-2003 or got
a refund; 28 of them got tax rebates in all 3 of those years even though
their combined profits totaled $44.9 billion; 46 of them, earning $42.6
billion in profits, paid no tax in 2003 and got $4.9 billion back in
tax rebates. And the average CEO pay for these 46 companies in 2004
was $12.6 million.
Along with big tax cuts and
generous rebates, big corporations are on the government dole big time
in the form of subsidies, otherwise known as "corporate welfare."
It's also known as socialism for the rich (and capitalism for the rest
of us). In 1997 the Fortune 500 companies got $75 billion in "public
aid" even though they earned record profits of $325 billion. They
got it in many forms - grants, contracts, loans and loan guarantees
and lots more. Today there are about 125 business subsidy programs in
the federal budget benefitting all major areas of business.
Some examples of this government
Selling the rights to billions
of dollars of oil, gas, coal and other mineral reserves at a small fraction
of their market value.
The giveaway of the entire
broadcast spectrum to the corporate media, valued at $37 billion in
Charging mostly corporate
ranchers (including big oil and insurance companies) dirt cheap grazing
rates on over 20 million acres of public land.
Spending many billions of
dollars on R & D and handing over the results to corporations free
of charge. "Big Pharma" is notorious for letting government
do their expensive research and then cashing in on the results by soaking
us with sky-high prices and rigging the game with through WTO rules
that get them exclusive patent rights for 20 years or longer when they're
able to extend them through the courts.
Giving the nuclear industry
over $100 billion in handouts since its inception and guaranteeing government
protection to pick up the cost in case of any serious accidents that
otherwise might cost the company affected billions and possibly bankrupt
Giving corporate agribusiness
producers many billions in annual subsidies.
You and I, the individual
taxpayers, pay the bill for this generosity. But we actually pay these
corporations twice - first through our taxes and then for the cost of
their products and services. And they don't even thank us.
The Biggest Recipient
of Government Handouts
In the old game of "guns
vs. butter", guess who wins? Clue - they have shareholders, and
their chiefs are called CEOs. Guess who loses? You know that answer
chapter and verse by now.
The Wall Street film character
who explained that greed is good might have added war is even better.
Call it greed made easy or without even trying. Since WW II the Pentagon
and military-industrial complex have always been at the head of the
handout queue to get their king-sized pound of flesh in appropriations.
The amounts gotten varied in times of war and peace or with the whims
or chutzpah of a sitting president, but they're always big. The Pentagon,
defense contractors and all the other many and varied thousands of parasitical
corporations servicing the defense industry are umbilically linked.
All these corporations profit handsomely in our military-industrialized
society that takes our tax dollars and hands them over to them by the
hundreds of billions annually. Their gain is the public's loss. If the
process were audible we'd be able to hear a "giant sucking sound"
of public resources wooshing from our pockets to theirs. It's also the
sound of our lifeblood being sucked away as we have to pic up the tab
and give up our social benefits as well.
Once the cold war ended after
the Berlin wall came down and the Soviet Union became 15 independent
republics, there was some hope for a peace dividend - meaning less for
the military and more social spending. That wasn't what the first Bush
administration and Pentagon had in mind as they frantically searched
for and easily found new potential enemies as a way to make the case
for continued militarized state capitalism. Our language manipulation
experts came up with and sold to the Congress and public the threat
of "growing technological sophistication of Third World conflicts"
which "will place serious demands on our forces" and "continue
to threaten US interests," even without "the backdrop of superpower
competition." Our defense strategy would thus be based on maintaining
global "stability" (more code language meaning assuring obedience
to US dominance).
In the 1990 National Security
Strategy, the Pentagon presented its defense budget to the Congress
using the above stated pretext to justify what they wanted. It called
for strengthening "the defense industrial base" (code language
for the high-tech industry in all its forms) through generous subsidies
as incentives "to invest in new facilities and equipment as well
as in research and development." They got what they wanted, and
it set off the high tech stock market boom that lasted until the speculative
bubble burst in March, 2000 when the economy slowed and slipped into
recession. Three years later in a post 9/11 environment, the economy
was again growing as was annual defense spending, and the stock market
began another ascent that's so far continuing.
The many corporations now
benefitting from Pentagon largesse are so addicted to it that they become
the main promoters of and cheerleaders for conflicts or preparations
for them because they guarantee bigger handouts that are so good for
business. It's a dirty business, but isn't that the fundamental predatory
nature of large-scale capitalism that relies on a state policy of imperialism
to thrive and prosper. Senator Henry Cabot Lodge explained it in 1895,
in an unguarded moment, when he said "commerce follows the flag."
He might have added that the flag also follows commerce. The great political
economist Harry Magdoff, who died this year on New Year's day, also
explained it well in his 1969 book The Age of Imperialism when he wrote:
"Imperialism is not a matter of choice for a capitalist society;
it is the way of life of such a society." And historian Henry Steele
Commager wrote about how a national security police state and its bureaucracy
lends its great talents and resources "not to devising ways f reducing
tensions and avoiding war, but to ways of exacerbating tensions and
preparing for war." I guess the conclusion is that in a capitalist
society dominated by big business this "bad seed" must be
in our DNA and we can't help ourselves as a result. In another article
I'm working on I refer to our addiction to war. So far we haven't found
an effective antidote.
The reason, of course, is
because war is so good for business. In the last 6 years alone, and
especially since 9/11, along with all their other largesse and waste,
the Pentagon outsourced on average $150 billion a year in work to corporations.
Almost half of it was in no-bid contracts and three fourths of that
was to the five largest defense contractors headed by Lockheed Martin
and Boing. L-M is the undisputed king of contractors. They literally
run the enterprise of empire from the inside and out. They're not only
its biggest beneficiary, they also help shape the policy guaranteeing
it - to the tune of $65 million every day (from our pockets into theirs).
And they collect their loot even when their killing machines don't work
Then, of course, there's
Halliburton and Bechtel. They're always big time winners in the handout
sweepstakes. These two well-connected companies have been at the head
of the queue in the looting of Iraq and the US Treasury. They've gotten
huge no-bid contracts worth many billions which they then freely supplemented
with gross (read: criminal) overcharges and gotten away with most of
it. And we can't ignore the notorious Carlyle Group, the nation's largest
privately held defense contractor with the tightest of ties right to
the Oval Office. They practically sit in the traditional Kittinger chair
there, or whatever other brand George Bush may prefer. His father, and
former president, of course, is on their team (and payroll), and they
use him as needed as their main "door-opener" and "wheel-greaser"
(especially in the lucrative Middle East). And the old man reportedly
earns a hefty half million dollars for every speech he makes on behalf
of his generous employer. At that pay scale he must be hard-presed to
keep his mouth shut.
Guess How Big Funding
National Defense Really Is
The Center for Defense Information
reported that since 1945 over $21 trillion in constant dollars has been
spent on the military. And it's been done largely to benefit US corporations
even though the country had no real enemies all through those years
- except for the ones we attacked with no provocation or invented to
scare the public so they'd buy into the scam that we needed industrial
strength military spending for national security. Ronald Reagan was
very adept at scare tactics and duping the public. He fathered the Contra
wars in the 80s in Nicaragua and scared half the public into believing
the ruling Sandinista government was a threat to invade Texas and threaten
the whole country. He tried and failed to get Mexican president Miguel
de la Madrid to go along with him. The Mexican president said if he
did 70 million Mexicans would die laughing. It's hard to believe the
US public could ever fall for a threat about as great as I'd be (all
120 lbs. of me) in the ring against Mike Tyson in his prime But although
there was none and the nation was at peace during his tenure, Reagan
expanded the military budget by 43% over what it was at the height of
the Vietnam war (and ran up huge budget deficits doing it). The public
suffered for it with the loss of social benefits, but business loved
it and him, and the stock market took off on an 18 year bull run.
But after the 9/11 attack,
the floodgates really opened wide. In fiscal year 2000 the military
budget was $289 billion, but up it went steadily after that reaching
$442 billion in 2006 and currently is requested to increase to $463
or higher in 2007. Add to that over $41 billion for Homeland Security
in 2006 (another public rip-off as part of a move toward a full-blown
national security police state) and annual multi-billions in funding
off the books for the Iraq and Afghanistan wars that in fiscal 2006
alone amounts to about $120 billion now and may increase. Add it up
and the current budget for the military, 2 wars off the books and Homeland
Security, and it comes to over $600 billion this year. That kind of
spending, with billions more available at the drop of an add-on presidential
emergency request gives a whole new meaning to the term "war profiteer."
And while the big defense contractors reap the biggest benefits, many
thousands of US corporations are in on the take as the Pentagon is a
big buyerof everything from expensive R & D and high tech weapons
to breakfast cereals and toilet paper. Using the false Bush slogan about
leaving no child behind for his failed education program, the Pentagon
for sure leaves no corporation behind in its generosity. Corporations
wanting a piece of the action need only remember and abide by the scriptural
message from John 16:24: "ask and you shall receive." And
probably a lot as the Pentagon is notorious about being sloppy, "spilling"
more than many good sized corporations earn.
Here's the 2 key questions
to ask. Does anyone feel safer, and who'll pick up the tab? If you hadn't
noticed, you, the average worker, didn't share in those big tax cuts,
your income is losing the war to inflation, your benefits are eroding,
and someone some day has to pay that $8.275 trillion national debt that
keeps rising $2.2 billion every day. And along with that burden, we've
never been less safe, and we, the public, have to pay the bill because
corporate America never does. They're in another queue for more tax
cuts, and we'll see more social benefits cut to pay for them too. In
the political game of musical chairs, corporations get them all every
time, and John Q. Public is always left standing (out in the cold).
How Did We Get Into
and How Can We Get Out of It
I've already explained what
happened. As to how, it's because we let them. They delivered the message,
and we bought it like lambs led to the slaughter or believing the "foxes"
were really "guarding" us. Back in school we all learned and
sang those lovely lyrics that began "Oh beautiful for spacious
skies, For amber waves of grain." We believed it and most of us
in our stupor still do. It's long past time we realized it was just
a song intended to lull us into complacency to accept the message and
go along with it. It was a false message, although there is an America
the Beautiful, but only for the privileged few and no one else. And
every year it gets worse - a race to the bottom with no end in sight
until we either get there or wake up in time and do something about
it. Unless we act to cauterize our collective wounds we'll never begin
the healing process; in fact, we'll bleed to death. We have to find
a way to reclaim the democracy we're always being reminded we have,
but don't. If we reall had it, they'd never have to remind us about
People Power Is How
We Get Out of It
It's not too late to turn
it around - yet. And it's simple to know what we need to do but always
hard knowing how to go about it - take to the streets, throw the bums
out (we've tried that one before and only put in new bums). Anyone have
some good suggestions? I don't have sure-fire ones, but I've got a piece
of good wisdom based on the past and the present. History shows that
when things get bad enough people first stir and then react. If nothing
changes and the pain gets bad enough, then at some point down go the
barricades, and people power steps into the breach. The many always
win out over the few when they're fully committed to do it. I"ve
quoted famed Chicago community activist Sol Linowitz before who understood
it and once said "the way to beat organized money is with organized
people." Three recent and current examples make the point and show
All over France for two months
up until April, millions of angry young people and union members mainly
engaged in strikes, sit-ins and mass street protests to demand the revocation
of the new First Employment Contract (CPE) for workers under 26 years
of age. French youth refused to become what they called "a Kleenex
generation" - to be used and thrown away at the whim of employers
who want the "flexibility" to do it. The law was based on
the insane notion that indiscriminate firing was a way to create more
jobs and reduce unemployment. If it had gone into affect, it would have
given employers the right to hire young workers on a two year trial
basis and fire them at will at any time during that period. The protesters
understood the sham and how it would hurt them and stayed out long enough
to get the Chirac government to back down and effectively cancel this
A second example is now happening
on the streets in Nepal as many thousands of people from all walks of
life including professionals have been protesting since early April
in a mass civil uprising against King Gyanendra demanding an end to
autocratic monarchal rule and the restoration of democracy. At this
writing they still don't have it, but the king was forced to go on national
television and promise to meet their demands. At this writing the protests
are continuing, and the people so far are unsatisfied with what their
king has told them.
The third example has been
happening here in the US as millions of immigrants and working people
of all races have taken to the streets in cities all over the country.
They've seen their rights denied or threatened, their jobs exported,
unions weakened or destroyed, wages stagnated and essential benefits
reduced, lost or never gotten. Their protests are continuing, and they
demand equity and justice. Congress has already taken note and softened
some of their hostile anti-immigrant rhetoric. But it remains to be
seen how this will turn out. The Congress will resume its immigration
legislation debate in its post Easter break session with a final resolution
now unclear. What is clear is that if a final bill emerges it will be
less harsh than the original House version that passed and the Senate
one still being debated prior to and during the mass protests.
The lesson is clear. Mass
people actions, if large and strong enough, get results. Lots of great
thinkers through the years knew this and said it many different ways.
I quote some of them often for inspiration, and I'll end by doing it
again - 2 jewels from one of my favorites - the Mahatma. Ghandi wisely
observed that "even the most powerful cannot rule without the cooperation
of the ruled." He proved it. He also famously said - "First
they ignore you, then they laugh at you, then they fight you, then you
win." He proved that too.
Anyone ready for a fight?
I hope you are, and if so, you and we too can win. And just in case
I need to remind you what you're fighting for, it's for your future,
the kind your parents hopefully had, the kind you want for your children,
the kind where you know you live in a country with a real democratically
elected government that works for all the people and one where there's
equity and justice for everyone, not just for the privileged the way
it is today. It's also to save the republic and reverse the present
course we're now on that may destroy it. Think about it, and start fighting
for it. Your future depends on it.
Stephen Lendman lives
in Chicago and can be reached at [email protected].
Also visit his blog address at sjlendman.blogspot.com.