The Corporate Control Of Society and Human Life
By Stephen Lendman
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 for their 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 Corporations and the Harm They Cause
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 hold.
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 with 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 Corporate Behavior
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 no 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 Transnational
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.
- Of the world's 100 largest economies, 51 are corporations.
- 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.
- The Group's combined sales exceed the total combined economies of all nations in the world except the largest 10.
- 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.
- Despite their combined size and percentage of world economic activity, The Group employs only 0.78% of the world's workforce.
- 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.
- 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 insurance.
- 82 US corporations are in The Group, twice as many as Japan with 41, the next highest contributing country.
- 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.
- 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.
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
real "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 used, 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 they 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
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 to services.
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 jobs abroad.
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.
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 family.
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.
Statistics Documenting the Decline
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
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
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 lower 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 feed themselves.
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 keeps widening.
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 abide by 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 lose.
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
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
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 is
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.
examples of this government largesse include:
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 1989 dollars.
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
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 pick 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 of 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 right.
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-pressed to keep his mouth
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.
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 buyer of 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 this Mess, 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 really had it, they'd never have to remind us about it.
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 us how.
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 outrageous law.
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 had to go on national television and promise to meet their demands. The protests continued
after his first public statement forcing the king to go further and agree to the major demands of the main seven-party alliance
including reinstating the lower house of parliament and giving power back to elected officials. Doing that would then clear
the way to create a new constitution, hopefully a more democratic process and an end to the mass protests. At this writing
it remains to be seen whether resolution has now been reached, but it appears a major step has been taken toward it.
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.
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@example.com.
© Copyright Stephen Lendman