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Confronting the "Corporate Mystique"
by Paul Kurtz
The following article is from Free
Inquiry magazine, Volume 19, Number 3.
In the Fall 1998 issue of Free Inquiry,
and in subsequent editorials, I recommended that we form a neohumanist coalition. I
suggested that the secular humanist movement take a new turn, that it crystallize a
neohumanist point of view in politics and make its views known to the broader public. [1] These editorials elicited a great number of
letters from our readers, many warmly supportive of this position, some indignantly
against it.
It is clear that one can be a secular humanist and not accept the social-political
agenda that I propose below. It is apparent that from belief in God, one can be a
monarchist, slaveholder, authoritarian, totalitarian, libertarian, conservative, liberal,
or social democrat. Theists have espoused all of the above positions and more
historically.
Similarly, one can be an agnostic or atheist and vote Republican or Democrat,
Libertarian or Socialist, Green Party, left-wing or right-wing. There is no necessary
connection between being a theist or nontheist and supporting a specific political party.
The same thing is not necessarily true, however, of modern secular humanism; for
although secular humanists are skeptical about theism, humanism involves a distinct set of
ethical principles that put it into opposition to certain political ideologies. Humanists
have held that each individual has inherent dignity and value - or at least ought to be so
treated. Humanist ethics concentrates on the individual, and the actualization of his or
her highest values, but it is also concerned with the social good, and this implies that
it is essential to develop just societies that will maximize both individual happiness and
social well-being under conditions of fairness and equity. As a consequence, contemporary
humanists generally have maintained that the best way to realize happiness is by means of
free, open, and democratic societies (I have in mind here John Dewey, Karl Popper, Sidney
Hook, Bertrand Russell, etc.); and they have been foes of repressive institutions, whether
political, ecclesiastical, or economic. Humanists thus have fought for human rights as
essential safeguards of democracy. They have defended freedom on many fronts - free
thought and free inquiry and some degree of moral and sexual freedom. And they have
defended also the democratic principle of equality; for example, equality before the law,
equal opportunity, etc.. Some humanists have argued that humanism also entails some
measure of economic freedom - though the degree of regulation of free markets is open to
serious debate.
The humanist battle historically was against the Church and its repressive
institutions, and also against authoritarian governments and totalitarian states. Today, I
submit, a new battle for freedom is emerging, i.e., the battle to be liberated from
"the corporate mystique" that now dominates the United States and other
economies of the free world. [2] I realize that
to say this is akin to a sacrilege, for the corporate mystique is almost never questioned.
Indeed, the corporate mystique assumes the characteristics of a sacred religion. Powerful
corporations now dominate our culture; they are largely unchallenged and are given free
rein to do what they want. Any effort to restrain corporate power is today virtually
nonexistent. At the beginning of the twentieth century there was a popular outcry against
the excessive power of trusts and monopolies, and the Sherman Anti-Trust Act was enacted.
This effort has largely been muted in the United States, where merger mania reigns
supreme. Interestingly, mergers and acquisitions have flourished under both Democratic and
Republican administrations. The Microsoft and Intel cases are exceptions, for very few corporate
conglomerates in recent years have been challenged by the government. Corporate-merger
mania now is also rampant in Europe and other parts of the world, though not on the same
scale as in the United States.
We are all familiar with the Marxist challenge that confronted capitalism for almost a
century. Nationalization of major industries in so-called socialist countries was offered
as a panacea. This has been discredited. Communism could neither deliver the goods nor
feed its people. Moreover, it denied them democracy and cultural freedom. As a result, the
free-market ideology now reigns supreme. The libertarian view is that free markets should
be left unregulated; for these are the best engines for economic growth. The free-market
libertarian believes that this will in the long run maximize the happiness of society.
Even China has been able to grow by unleashing the power of the free market. Milton
Friedman argued "that the only social responsibility of business is to increase
profits." [3] We may ask, Does business have
any responsibilities for the commonweal beyond that?
America is enjoying unparalleled prosperity. The stock market seems to be experiencing
a never-ending speculative boom. Forty percent of American households are now invested in
equities, either directly or through retirement plans and mutual funds, and they applaud
the great corporations that succeed. These companies are judged by their bottom lines,
earnings, dividends, and potential growth. The president of General
Motors, Charles Wilson, many years ago said that "What was good for our country
was good for General Motors, and vice versa." Most Americans are impressed by what
corporations like IBM, AT&T,
Exxon, GE, Coca-Cola, and Intel
are able to deliver. America has become the world's only superpower. Its standard of
living is rising; cheaper prices and better services are available-and this is a result,
we are told, of the corporate culture in which we live. The budget has been balanced, and
there is even a surplus. Hallelujah to the free market! the choruses chant.
Now, perhaps it is a sacrilege to find chinks in the armor of the corporate mystique;
but I think that a more balanced appraisal would be helpful. The current economic boom
(How long will it last?) is due to many factors, including scientific research and
technological innovation. Industry is able to invest in new companies and bring new
products to the marketplace; but institutions of higher education, in training the
scientific-technological elite and encouraging basic research, have played a key role
here. Moreover, the labor movement and the democratization of our institution have also
contributed to our prosperity.
Yet if we take a closer look at American prosperity, disturbing trends appear.
First, many members of our society have not shared in the affluence. Indeed, the
disparity in income between rich and poor is greater than it has ever been. The top 1% of
the population own $4 trillion in assets, the bottom 80% only 6% of total assets. Bill
Gates's $70 billion is equal to the net worth of 40% of Americans.
Second, as corporations become more global in reach, they find it cheaper to produce
goods abroad - in Asia and Latin America. Thus, jobs are exported, and American wage rates
must compete with those of underdeveloped countries. The working person faces the threat
of job insecurity due to downsizing and outsourcing. Temporary and contingent workers
replace permanent personnel, with a decline of benefits, seniority, and security - there
are still no health or retirement provisions for 40 million citizens.
Third, merger mania continues. In 1998 the total number of merger deals announced rose
76% to $1.6 trillion, the highest on record ($2.41 trillion worldwide). These include the Exxon/Mobil merger, Citicorp/Travelers,
AT&T/TCI. Some
believe that every industry will end up with two or three oligopolies dominating the
market. Many people uncritically applaud these tendencies. The sheer growth in size in
corporations is astounding. Several global corporations are more powerful than most of the
countries in which they do business. One has to ask the question: What will this enormous
concentration of economic power do to democracy?
Fourth, the corporate mystique is such that many people believe that all areas of
social life should be privatized. We have seen this happen in the pharmaceuticals
industry, hospitals and healthcare, and it is beginning in schools and prisons. Are we
willing to allow all of our institutions to be judged by considerations of profit alone?
Business is more efficient than government, it is said. Why not? Because there are, I
submit, other values in society besides profit that need to be encouraged.
Fifth, I have previously written in Free
Inquiry about the takeover of the media by conglomerates. Media moguls and
merchants - Rupert Murdoch's News Corporation, Disney, Time-Warner,
etc. - now dominate what Americans see, read, and hear. Included in this equation are
foreign companies - such as the German corporation Bertelsmann, now the largest trade
publisher in the United States, and the British company Pearson
PLC, the dominant educational publisher. If American democracy presupposes a free
market of ideas, what guarantees do we have that the global conglomerates will allow
diversity and not squeeze out dissent? This is already happening at a rapid rate, as
independent publishers, newspapers, magazines, radio and television companies are being
gobbled up.
I believe that the media must be open to diversity, and there are certain practical
remedies that I would recommend, such as the repeal of the infamous Telecommunications Act
of 1996. The 1996 act allowed major media companies to expand their radio and television
market share, with disastrous consequences. There is, I submit, a need to limit ownership
in a market by media companies. I submit that the Fairness Doctrine, which was repealed
during the Reagan administration, needs to be restored, for it would require stations to
give an opportunity for diverse opinions to be heard in a community. I also think that
anti-trust laws should be enforced, especially when oligopolies intrude on the realm of
ideas. I think that there is an urgent need to create a second nonprofit television and
radio corporation with complete integrity and independence. This might be financed by
either a tax on commercial broadcasters and/or the creation of an endowment fund.
The American Constitution is based upon a system of checks and balances between the
three branches of government. This system has prevented the emergence of one branch of
government with overweening power. I submit that we need some checks and balances on the
emergence of excessive corporate power. This had been held in check in the past by the
existence of countervailing centers of power - which are being seriously weakened today:
- The labor movement in the 1930s played a key role. But the influence of labor has been
reduced from 34% of the workforce in 1954 to 15% today. (It is 80% in Sweden, 35% in
Germany.) With corporations becoming international, how can labor play a role when it is
at the mercy of threats of international conglomerates to export jobs to Thailand or
Mexico, India or China?
- Since the Reagan revolution, the countervailing role of the government has been
diminished. The Reaganites considered government to be a major problem, and they ignored
the increased power of corporations at the same time that they sought to emasculate labor
unions. Clinton has moved his administration to the center of the political spectrum.
Embroiled in constant combat against efforts to throw him out of office, his domestic
policies are impotent; he has been unable to achieve many of his programs. The anti-trust
division is weak. Moreover, corporations have spent $2 billion (in 1996) in financing
campaigns, which tend to subvert the political process and prevent anti-trust action from
being effectively applied.
- Countervailing forces, we are told, are often other corporations, that can compete in
financial markets. Often this is based on new technologies that emerge to challenge older
companies. There is some truth to this, but I have two caveats. First, in some industries
there are only three, two, or even one player - witness Boeing in the United States, which
competes primarily with Airbus on the international scale, or cable companies, which
dominate regional markets and raise prices with impunity. Second, increasingly these
corporations have worked out partnership arrangements (as in the airline and
telecommunication industries), which weaken competition and leads to the development of de
facto monopolies.
- We need a new countervailing force, namely voluntary nonprofit movements to influence
public opinion, such as the American Civil Liberties Union,
the Sierra Club, the National
Organization of Women, the universities, and new political alliances such as the
neohumanist coalition. Many people agree. The free-market economy has increased the wealth
of nations enormously. It has led to more efficient industries, lower prices, and
increased consumer goods. Economies of scale that reduce prices are important. Similarly,
it has contributed to the economic development and prosperity of the Third World by
investing in new industries.
But, I ask, at what price? Enormous centers of power, such as Exxon/Mobil on a global
scale, have emerged with no regulation or restraint, except from the bottom line and the
demand for earnings increases by Wall Street investors. I ask, Will this mean a corruption
of the political system, even the castration of democracy? If one believes in individual
liberty and a free society - as liberals, conservatives, libertarians, and social
democrats do - and if one opposes totalitarian control, then one must worry about what the
enormous concentration of wealth and power do to our democratic institutions. Perhaps it
is time for neohumanists to raise questions about the corporate mystique. In the past the
predominant motto was pro ecclesia et patria, for church and state. The motto today, at
least in the United States, is pro ecclesia et commercia (for church and corporation).
Interestingly, Europe is now controlled by socialist or social-democratic parties in all
but two of the fifteen countries. These governments are willing to regulate these
corporations for the common good; although they believe in free markets, they also believe
that there are other social purposes that society needs to fulfill.
I think that there are remedies within the free-market democratic system to restrain
and limit corporate control. Such remedies would not be antagonistic to our economic
system, but may help to strengthen it by leading to a genuine capitalism with a human
face. I can only touch briefly on some of these. (1) We can continue to extend employee
ownership of the stock in the corporations in which they work. (2) Moreover, employee
representatives could sit on the boards of directors of corporations - as they do in
Germany and other European countries. (3) Shareholders' rights should be encouraged and
protected, and the elections of officers and the voting on important policy issues should
be submitted to shareholders' approval. (In order to be most effective, perhaps this
should apply only to those stockholders who have owned their shares for a year or more.)
Another problem here is that so many shares are held by powerful mutual funds. (4) Before
a company can arbitrarily move out of a city or state, adequate notice and consultation
with representatives in the area should be mandated; perhaps even their approval and/or
exit fees should be required. (5) On the international level additional rules and
regulations should be enacted and enforced by the World Court and other international
agencies. (6) Of vital importance would be the prohibition of corporate lobbies
contributing to campaigns - this may do more than anything else to limit undue corporate
influence on the democratic process. No doubt there are many other remedies beyond the
above that can be suggested.
Now I readily grant that many humanists - who will accept other aspects of the humanist
agenda - will demur at what I have said. At the very least, I submit, we need an open
discussion in America about the enormous concentration of corporate power and possible
ways of dealing with it. Unfortunately, because of corporate control of the media this is
now difficult to do. There are too few voices of dissent. Only Ralph Nader in the 1996
presidential campaign sought to raise this issue, and George Gerbner of the University of
Pennsylvania and the Cultural Environment Movement have focused on corporate domination of
the media. Pat Buchanan from the other end of the political spectrum has expressed
populist misgivings about the impact on American industry and workers of the North
American Free Trade Agreement and other regional and global trade treaties. Eisenhower
warned years ago of the military-industrial complex; this has today become the
"corporate conglomerate complex."
In any case, I reiterate that we need to begin a national debate on the role of the
corporation in democratic societies. We need, I submit, a new grass-roots citizens'
movement to deal with "the corporate mystique."
Notes
- I argued that if the Christian Coalition and Vatican supporters in the United States
could advocate a social-political agenda, why not humanists? (See "Humanist Politics:
The Need for a New Coalition," Free
Inquiry, Fall 1998.)
- For a responsible discussion of this, see the book by Charles Derber, Corporation
Nation: How Corporations Are Taking Over Our Lives and What We Can Do About It (New
York: St. Martin's Press, 1998), pp. x, 374. For a discussion on corporate control of the
media, see Ben H. Bagdikian, The Media Monopoly (Boston: Beacon Press, 1997).
- The New York Times Magazine, September 13, 1970.
Paul Kurtz is Editor-in-Chief of Free Inquiry magazine.
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