If we accept that unfettered corporate capitalism is a threat to
democracy, then we are obliged to restructure our economy so it
operates for the good of all people. To do so, we must first puncture
the prevailing economic myths that erode democracy.
Throughout history myths have served as ideological glue for popular
perception. These false or unproven collective beliefs serve to
justify certain social arrangements. For example, the Manifest Destiny
myth of the limitless American frontier served both as a philosophy
for the expansion of opportunity as America's immigrant population
grew rapidly and as a justification for seizing the property of
indigenous people. Myths simplify how people perceive the world,
perniciously determining what people believe and what they do not.
The myth of America as the cradle of constitutional democracy, for
instance, flourished while slavery was an accepted practice.
Integral to the prevailing philosophy of utopian capitalism is
the myth of the self-regulating marketplace. In the ideology of
corporate capitalism, the marketplace supposedly dictates the solution
to all problems. If businesses are unsure what benefits to provide
employees, they are told to follow the wisdom of the market. Such
thinking has led to a dramatic increase in the use of temporary
employees who lack both job security and benefits. If governments
are in conflict over what public services to provide, they are told
to privatize and let the market sort it out. In Great Britain this
has led to the deterioration of a once splendid train system.
This logic assumes that the market will solve each problem because
it is operating as an objective, self-regulating economic force--part
of the natural order in the universe of international economics.
The fallacies in such an assumption are numerous. Because the marketplace
operates under the limiting assumption that it exists to protect
property rights, it conflicts with a concept of justice that places
a greater value on human rights. Thus adhering to the law of the
marketplace necessarily leads to actions that we view as unjust.
For example, the decision to close a U.S. plant and lay off its
workers so production can be moved overseas, where wages are lower,
makes sense from the standpoint of the market. This decision doesn't
make sense to those who would place a great value on the right of
workers to have a job that pays a living wage, rather than the desire
of corporate stockholders to expand their wallets.
Further, the marketplace is not in fact self-regulating. Most economists
agree that there must be central banks like the Federal Reserve
to manage the international money supply. In many parts of the world,
the operations of U.S. multinational corporations have long been
protected by the U.S. military--hardly a natural mechanism. Further,
some U.S. companies compete in the world marketplace with the help
of government subsidies. One shining example is the export tax exemption
that Congress passed in December, permitting companies like Boeing
to avoid paying taxes on 15 to 30 percent of their export profits.
Lastly, corporations are falsely asserted to be part of a natural
order. In fact, corporations are artificial legal structures, and
therefore should be subject to the control of the citizens of the
countries that authorize them. The problem is that once a corporation
(or a trade organization such as WTO) is authorized, they begin
to act as if they had all the rights of an individual. They become
difficult to control. (More about this in my next column.)
Instead of accepting the myth of the self-regulating marketplace,
we must strive to envision economics with a human face. Every aspect
of the marketplace should be subject to common sense principles:
Does this contribute to the common good? Does this organization
promote true democracy?
In my next column, I'll examine two more myths, the "corporation
as person" and the "level playing field."