Corporatism in America

Tax professor Linda Beale describes her perception of "corporatism" as it has developed in America:

As readers of this blog know, one of the worrisome developments over the last few decades, related to the rise of the distorted view of commercial markets under the pseudo-scientism of freshwater economics, is a version of "corporatism" that concedes enormous political power to large and wealthy corporations and their managers/owners.  The worrisome brand of corporatism is a  politico-social view under which large corporations' activities are presumed to be appropriate because they are businesses, and corporations' interventions in the political marketplace are as welcome as individual citizens' participation.  Corporate wealth translates to political power and that leads to greater corporate wealth.  It requires the government to refrain from actions that might be construed as governmental intervention in corporate decisionmaking--be it compensation of workers, compensation of executives, ability of unions to form freely, concentration and consolidation of industries.  But it also assumes the kinds of government support for business that business demands, such as low taxes, relaxation of anti-trust enforcement, supportive legal structures that empower corporations over individual citizens and that further corporate aggrandizement (e.g., the proverbial "tort reform" calls by the medical-insurance establishment; the expansion and relaxation of rules for tax-free corporate mergers and consolidation during the Bush Administration; Treasury's "nullification" of statutory law by administrative fiat in allowing Wells Fargo to use Wachovia's losses in violation of section 382, etc.), and the socialization of losses/privatization of gains that we saw in the way that the financial crisis "bailout" was handled.  (See prior ataxingmatter postings regarding the kinds of controls that we should have imposed at the moment of coming to the "too big to fail" financial institutions' aid.)

Corporatism is furthered by the Supreme Court's obscene decision in Citizens United that corporations are "persons" fully protected by the First Amendment free speech protections in respect of how they may spend lobbying money to support (or undercut) political actors.  As a result, corporations can now use their huge size, their multinational presence, their enormous coffers to influence elections to ensure that politicians friendly to the corporate agenda will be elected and a corporate-friendly agenda will be enacted and enforced--regardless of the impact on standards of living and life generally for ordinary Americans.  This threatens the very foundations of democratic capitalism.

The general support by various propaganda tanks for the corporatist agenda--in the guise of being for "freedom" and "liberty", which are mistakenly constantly evoked as involved when one talks about competitive businesses or the appropriate balance in politico-social-economic policies--has already helped to foster a prevailing mindset in America that anything that big business does must per se be good and that equity concerns should take a back seat to "economic growth" (as prescribed by the pseudo-science).  This is like the worst nightmare scenario for development out of the efficient market hypothesis--an absurdly limited theory (based on a slew of assumptions that do not hold water in real life) is used to foster the idea that "the market is always right" and "the market can self-regulate".  What we end up with is the financial crisis, where banks gambled on high stakes with socialization of their losses and privatization of their gains. 

This resonates with me because she focuses, as I often do, on macroeconomic pseudoscience as bogus but politically useful support for policies that are good for elites but objectively harmful to the vast majority of Americans. 

Comments

[Christine]

Did you catch the Ron Paul speech where he said that Obama was not a socialist, he was a corporatist?