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This review is from: Power, Inc.: The Epic Rivalry Between Big Business and Government- —and the Reckoning That Lies Ahead (Hardcover)
Appropriate balancing of public and private power is a central issue that helps determine the success of societies. About 15 years ago Americans celebrated the triumph of American capitalism and the defeat of state power by the focus of the marketplace - we'd shown that our balancing of the two was superior, if not optimum. Today, it is clear that our celebrating was premature. The freewheeling market model promoted by America is now reeling from self-inflicted wounds, while new models developed elsewhere (eg. China, Brazil, Israel, Singapore, the UAE) are providing better outcomes.
Author Rothkopf also points out this battle between Main Street and Wall Street is not unique to recent years, nor even to the U.S. - it has both raged years ago (Standard Oil vs. the trust-busters, Upton Sinclair/government vs. the filth, in-humaneness, and dangers of slaughterhouses, etc.) and across both oceans (England - 'Britain has the best democracy that money can buy;' China - moving from Mao's revolutions against businessmen to today's 'socialism with Chinese characteristics).
Unfortunately, since 1980 any semblance of proper balance between big government and big business has been lost - undermining our economy, politics, and international legitimacy. What drives this ongoing conflict? Markets find and exploit scale economies; scale economies, in turn, ease access to political and economic power. Another factor - confusing efforts to reign in alleged overreaching government power with supporting personal freedom. Reality, is that instead these 'victories' simply allow power to accrue to even less accountable private institutions whose interests do not align with those of most people. (Eg. Higher auto manufacturers' profits via emphasizing poor-mileage SUVs.) Thus, in the name of 'freedom,' we've opened the door to financial innovation that has brought excessive speculation. And pursuing the wrong overall economic goal (GDP) has led to loss of millions of jobs through off-shoring (eg. Asia), outsourcing (eg. Mexico), and hiring illegal aliens within our own borders. The former tight connection between economic growth and jobs creation is no more.
Rothkopf also expresses serious concerns over how voting rights have evolved in the U.S. We've gone from denying the right to vote to blacks, women, and while males who did not own land, to allowing each of the preceding to vote, again limiting suffrage via poll taxes (then overturning that practice), to now granting an enormous advantage to non-human corporations with cash. No other country claiming to be a democracy has granted corporations such a privileged role.
Originally corporations were state-sponsored entities whose existence were predicated on advancing the needs of the state. That no longer is the case in the Western world, and our corporations can now undermine society via off-shoring (Asia) and outsourcing (Mexico) millions of jobs, as well as hiring illegals within our borders by the millions. Interestingly, China avoids this problem via its heavy utilization of of state-owned-enterprises. (You probably also won't find any Chinese corporations emulating G.M. (helping Opel/Germany arm itself prior to WWII, assisting the management of Nazi death camps (IBM), or supporting Saddam (Haliburton).
The result - America has become greatly weakened, nearing or perhaps already a 'semi-state.' (A 'semi-state,' per Rothkopf, is one that cannot accomplish any of the four basic functions of a state. These are to manage its finances, project force or at least effectively defend itself, control its borders, and make and enforce its laws.) During the same time-frame, private actors have grown to the point where roughly their richest 2,000 are more influential than 70 - 80% of the world's nations. WalMart has revenues higher than the GDP of all but 25 nations. And the not-so-invisible hands of these mega-players now prevent addressing Global Warming, growing economic inequality, embracing new forms of energy, the need for regulating derivatives, etc. And they've helped shift the spotlight to Tea Partiers, instead of the fact that during the last three decades the gap between the bottom fifth and the top grew larger than it had at any time in history, and continues to grow worse.
Also turns out Adam Smith's support for businesses isn't all it's been claimed to be. 'To prohibit a great people from making all that they can of every part of their own produce, or from employing their stock and industry in the way they judge most advantageous to themselves is a manifest violation of the most sacred rights of mankind.' Rothkopf' take on Smith's 'invisible hand' - "too often we've found Smith's invisible hand to be an iron fist wrapped in an invisible glove."
The 'good news' from Rothkopf is that the 'Chicken Littles' are also premature. Rothkopf tells us there was just as much bickering, conniving, and stupidity in President Washington's time. And the Great Recession did not become a depression.
Bottom-Line: 'Power, Inc' is an excellent synthesis of today's conflict between government by voters vs. by influence-buyers.
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Showing 1-2 of 2 posts in this discussion
Initial post: Apr 9, 2012 9:05:36 AM PDT
T. Porges says:
"We" did not decide to grant corporations enhanced citizenship -- a one-vote conservative majority on the Supreme Court made that decision. This wasn't some sort of broad-scale evolution -- it was a stealth revolution from within, and could be easily overturned. This was the cost of allowing the Rehnquist court to impose Bush on the country via a Bench coup. It's a high cost, but none of it is constitutional, or hard-wired into the system. We have billionaire rule now, but there's no reason why the Public cannot rebel.
In reply to an earlier post on Apr 23, 2012 6:15:15 PM PDT
Last edited by the author on Apr 23, 2012 6:16:09 PM PDT
Exactly, TPorges. Take the way back machine and you will find that corporations that did wrong got terminated, unlike today. Enhanced citizenship, but no penalties today other than a slap on the hand. Hmmmm.
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