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Business and Government: What is the Solution?

An activist friend recently posted a question on Facebook, the gist of which was whether people believe that corporations had taken over most aspects of our society (government, education, military, etc.) and whether or not legislative action can counter such vast corporate power. She received a lot of varied answers, with most people believing that corporations have, in fact, taken over much of our society and mixed answers about what to do about it or the role that legislative action can have in fighting this development. 

Two of the major economic developments of the last quarter-century or so, which are related to each other, have been the enormous growth of the economies of non-Western and under developed countries (China, Vietnam, India, a group of sub-Saharan African countries) with a corresponding burgeoning of a middle class in nations in which they previously were extremely limited, and the growth of international businesses, whose workers are no longer in the same country as the corporate headquarters, which, in turn, may be located in a tax free or low tax country, rather than the country from which it originated. 

As a result of the first development, although extreme poverty still characterizes much of the world, income disparity is actually decreasing in many parts of the previously underdeveloped world. China, India and parts of sub-Saharan Africa have seen sustained GDP growth rates from 6%-10%, while OECD countries, with the exception of Saudi Arabia and Ireland, have seen growth from .5%-3% and mostly less than 1%. Wage increases of 40%-65% over the last eight years characterize such high-growth countries as China and Ghana. Ethiopia has expanded its educational system, lowered its infant mortality rate and modernized its infrastructure using massive government investment through taxing a constantly growing economy (although they have also curtailed human rights at the same time). Although income inequality still tends to be highest in the poorest countries of the world, the difference between developed and developing regions is narrowing, and several high-growth developing countries, such as India, Ethiopia, and Vietnam have achieved inequality below that of several European countries and the United States.

Global business has benefitted many people, particularly in some of the poorest regions of the world. Whether the profits from such business benefit the ordinary citizen or just those who, through direct ownership or shareholding, own the businesses, is often determined by government policies particularly policies on taxation and transfer of assets. Those countries with the strictest  tax and transfer laws (the highest rates for the wealthy) achieve the greatest income equality as the wealth from businesses and income producing activities is shared via redistribution through taxes. The United States leads the wealthy, developed nations of the world in income inequality, and such inequality is increasing, as a greater share of the wealth resides in the hands of a smaller percentage of the population. The corporations that do business and the people who own and run them determine government policy in the United States. Taxes do not have a strong effect on redistributing wealth within the United States, because tax policies are heavily influenced by lobbyists paid by the wealthy, and elections of our representatives are heavily influenced by campaign contributions from these same wealth and business interests. While the rise in international business has helped lift many in the developing world into the range of livable wages, it has mostly lined the pockets of the already rich in much of the developed world, particularly the United States, where corporate interests and the influence of the wealthy have controlled the political policies of both parties.

America has the largest and most costly military in the world. Despite this, the only part of the recently passed federal budget that did not engender debate from either party was the increase in military spending. The military and its weaponry is a staple of the American economy. Approximately 10 percent of the factory output in the United States goes into the production of weapons sold mainly to the Defense Department for use by the armed forces. More than half of the U.S. discretionary spending budget goes to the military and defense, and the amount has increased 13% in the last two years. Corporate lobbying and funding of campaigns influences the U.S. reliance upon a private health care system, leaving America ranked 37thin the quality of its healthcare system, despite spending the most per person on healthcare of any country in the world. In terms of the environment, despite overwhelming public support for programs to counter climate change, the U.S. is dismantling its environmental protections and its efforts to counteract global warming.

The well-known 2014, Gilens and Page study of influences on government legislative and policy decisions, which found that “economic elites and organized groups representing business interests have substantial independent impacts on US government policy, while average citizens and mass-based interest groups have little or no independent influence,” concluded that “When a majority of citizens disagrees with economic elites and/or with organized interests, they generally lose.” In otherwords, the owners of wealth and business interests control the American political system. Although Gilens and Page looked at head to head comparisons of public support vs. “economic elite” support, in fact, on many issues, the corporate world, through its control of much of the media, sways public opinion so that people support increased military spending, resist government funded healthcare, and are often skeptical of fears about climate change. 

Corporations, particularly those with global reach have had a positive effect in raising standards of living in many areas of the world (I know it can be argued that much of the destitution in these same regions can be attributed to historical plundering of their resources and control of their societies by the international business interests of imperialistic countries, but the recent advancements due to economic growth are real). The problem is that they are also controlling much of the decision making of the governments of the world (the TPP is a good example of how corporations virtually wrote the rules for an international economic agreement that in some instances, overruled local governments’ autonomy). The decisions made by corporations are made to enhance their profitability, not to profit the people who work for them, buy their goods, or live in the countries in which they pay their taxes. Their aim is not the good of the common man. What can be done to curtail their influence?

To be realistic, the world economy is being organized by increasingly global businesses, which, while they compete, have many of the same interests. Dismantling this organization would be catastrophic for much of the world, particularly those regions that are just emerging from decades, if not centuries, of poverty. Rebellion against the governments that control both the countries in which these corporations operate and which cooperate with each other, would be equally catastrophic. We have multiple lessons from the last two decades as to what happens when people attempt to overthrow their government by force, and the most powerful governments are more heavily armed than any of those of the minor dictators who have been toppled or challenged in recent revolutions. Specific instances of egregious business activities can be fought by actions such as boycotts, strikes and public demonstrations, but the massive influence of the corporate world on the lives of everyday citizens through controlling governmental decision making must be reduced if we want to live in a true democracy. 

The natural method of opposing the efforts of the economic elites in accumulating wealth at the expense of the welfare of ordinary citizens is to use the government and its policies to regulate rather than to collude with corporate interests. Tax policies, monetary policies, healthcare and decisions about how to insure a higher quality of life for all members of a society must be made by the citizens of a country with their own interests in mind. There are voices which have pointed out how this can be done with proposals such as Medicare for all, overturning the Citizens United Supreme Court decision, a guaranteed minimum income or guaranteed jobs. For these voices to assume center stage instead of being marginalized by assertions that they are “socialistic” or “unrealistic” the voices of the corporate world heard through the media need to be countered. This is starting to happen, as many of the above proposals have been given air and page time in the mainstream media as elected leaders such as Bernie Sanders, Corey Booker, Kirsten Gillibrand, Elizabeth Warren and others have espoused them. These are all proposals opposed by corporate America, and electing politicians who support them would be a beginning at taking back our country from the business interests that, in the words of my friend on Facebook, have “co-opted” it.




Reader Comments (2)

It is important to never discount the power of people. Some of the over 50 nonviolent revolutions in the last 30 years have been against some of the strongest totalitarian and brutal dictatorail states in the world. All states depend upon the acquiecence of the people. When people do not co-operate the secret police forces and armies mean nothing as they also are comprised of the people.
Currently nonviolent revolutions are occrrring at a rate far in excess of volent changes of government possibly because they are 2X more effective, 3X faster and produce only one tenth the casualties.
As a side note to history it must be noted that American independence was gained primarily through nonviolent means. A series of boycotts that were 98% effective blocked our trade with England, local economies provided for the needs of the people and independent congresses were operating in each of what became states instead of colonies, before the Declaration of Independence was formalized. England's war on the United States can be thought of as a war of re-conquest...they failed just as they failed to prevent India from gaining it's independence using similar nonviolent methods. England was the dominant world power.
The question is not whether people can take their country it is more a question of if, when, how and what will replace it.
Given that the corporate/wealthy elite control of society has existed for many decades and is supported by both political parties in my opinion it is going to take much more than voting for the best of the evils to resolve our difficulties.
Ugly as the reasons are ...time is on the side of the people. Global warming is accelerating, concentration of wealth (in USA) is accelerating, artificial intelligence and automation will disemploy billions of people, the Fed is planning a five fold increase in overnight interest rates that greatly increases world interest rates and all in the 2-15 year time frame.
People can only be squeezed so far...they say.

April 23, 2018 | Unregistered CommenterDariel Garner

Excellent points, Casey (and Dariel Garner in the comment section as well). There is a fundamental crisis as this morning's interview on "Letters and Politics" indicates. The well-versed host, Mitch Jesserich, had a conversation about liberal and illiberal democracies with Yascha Mounk. Mounk is a Lecturer on Government at Harvard University and a Senior Fellow in the Political Reform Program at New America. His newest book is "Democracy: Why Our Freedom Is in Danger and How to Save It." That interview will make you want to run out and sign up for the nearest politically active group you can find. https://kpfa.org/episode/letters-and-politics-april-23-2018/
To me, wealth is power and that power determines our freedom. Activism can trump wealth (excuse the use of the term) if the numbers are high and ardent enough. The rise of social media has given voice to activists, the newest of whom are the young and the ardent. And that is hopeful. However, it has also given a voice to the clever who have some kind of hypnotic power to convince many to vote against their own self-interest - voters who can't see, or who are afraid to see, the big picture. The reality that such a large group cannot detect simple fallacies of logic in statements that are repeated over and over truly remind a person of lambs being led to the proverbial slaughter. Part of the solution, aside from joining a group is to ask the question your activist friend asked on Facebook, Casey. (I personally wouldn't recommend Facebook exactly, but a different social media platform where one doesn't have the danger of alienating one's best drinking partner or perhaps even a spouse!) The other part of the solution is to learn the fallacies of logic ourselves, master them, and be brave enough to point them out to whoever is listening!

April 23, 2018 | Unregistered CommenterBillie Kelpin

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