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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

  1. 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.)
  2. 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).
  3. The New York Times Magazine, September 13, 1970.

Paul Kurtz is Editor-in-Chief of Free Inquiry magazine.


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