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Post Thoughts on "Greedy Corporations" and Evil Government: Response to Several WAISers
Created by John Eipper on 08/11/16 5:01 AM

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Thoughts on "Greedy Corporations" and Evil Government: Response to Several WAISers (Tor Guimaraes, USA, 08/11/16 5:01 am)

The conflict between greedy corporations, trade, and victimized consumers has been discussed in this Forum on many occasions. Sometimes the exchange has been heated but produced some light, and inevitably left some loose ends which I have pursued, culminating with some new conclusions. In summary, it started with my view that the Obama administration's proposal of the corporate-written, relatively camouflaged TPP is the latest effort by greedy global corporations to take more away from the US Middle class, à la NAFTA but on steroids.

Replying to my original post of 25 March, 2012, Randy Black on the same date declared he also "was not a fan of NAFTA way back when [he] worked for H. Ross Perot, who was vehemently against NAFTA." Then Randy turned and verbally attacked the billionaire George Soros as being some sort of criminal. Replying, I stated that if he has done something wrong, we should take him to court for punishment. Unfortunately, in comparing the leftist Soros and the right-wing Koch brothers, implicitly there is an imaginary symmetry of ignorance and nobility for both sides, which seems incorrect for the following reason: If one assumes the perspective that the historically ill-protected American middle class interests are paramount, the Koch Brothers support the wrong side in the struggle for clarity and democracy, while at least lately Soros has supported the right side.

This is not a belief; it is a statement based on both sides' behavior over time. For example, clear evidence can be seen in the struggle of the middle class to maintain democracy and their standard of living in the US. The people are trying to stand up against some "greedy corporate interests" behind massive financial fraud, bank bailouts, "too big to fail" getting even bigger, large corporate welfare programs, etc. On the other hand, it is true that some more socially responsible corporations also are supporting the people. And this dichotomy supports the notion that given his wealth, Soros could easily be actively participating in union-busting, increasing corporate welfare and the income gap between rich and poor Americans, ripping off the middle class, etc., as the Koch Brothers and many wealthy people do. Instead, Soros has chosen to support institutions and causes aimed at educating the common people, harnessing their political support, and reducing the gap between the rich and poor. I can tell you specifically how the Koch Brothers will benefit from their activities: more money and power. Can anyone tell me how George Soros benefits from a stronger labor movement, stronger democracy, trying to help the American middle class and poor people, the big losers in the perennial class welfare?

Commenting on my original post, Cameron Sawyer made some good points: "I think that it is important to remember that many of the themes in [Tor's] post of 26 March are exactly that--beliefs--which are not necessarily shared by everyone. ‘Greedy corporations,' for example, craving profits, profits, and more profits--this is an incantation we know most poetically expressed in Marx's 'Communist Manifesto.' But who are ‘greedy corporations,' exactly? Nowadays large public companies are owned not by capitalists, but predominantly by you and me. By pension funds, mutual funds, and insurance companies. They strive to produce their 7% to 9% return on equity, so that our pensions will grow a little, so that their managers will stay in their jobs and not be fired for poor performance. That is the typical ‘greedy corporation' today. In order to do so, they have to produce whatever they produce efficiently. So naturally they continually reduce costs and try to find things to produce which people want, and are willing to pay more for. I'm not sure it's the greatest job in the world, and I do believe that the conflict of interest between these so-called 'greedy corporations' and the rest of us is highly exaggerated. In my opinion, the conflict of interest between us and the state is much more profound, and much more threatening."

Cameron and I are in strong disagreement here. We must not forget the latest financial crisis, the greatest fraud ever perpetrated on the American people by "greedy corporations." Also please remember Enron, WAMU, and hundreds of famous but easily forgotten corporate fraud cases against investors, consumers, and even the government. Cameron should visit me at work someday; there are thousands of documented cases of criminal corporate behavior, destroying or severely hurting other companies, individuals and groups of people, whole nations, and the global environment. So please don't shut your eyes to the evidence and go religious regarding greedy corporations "craving profits, profits, and more profits--this is an incantation we know most poetically expressed in Marx's 'Communist Manifesto.'" The evidence is clear and consistent that many corporations are exactly that.

Cameron and I agreed that "It is we who buy the goods; they are not forced on us by greedy corporations." Alain de Benoist brought up an excellent point regarding the topic of free trade, free choice, and merchandising ideology. Alain stated, "Between doing something voluntarily and being 'forced' to do it, there are many intermediate possibilities. We live in a society based on mercantile/merchandise ideology, where almost everything, beginning with big media, radio and TV, suggest that happiness means the more buying of things, more consuming. To have more, not to be more. It is the only message delivered by commercials: how happier you will be if you buy our products. The aim is to make us believe that we always need something more, to create false desires, and to transform these desires into needs. Those suggestions have obvious consequences on behavior and values. When all values are reduced to exchange value, we enter a world where nothing has real value any more, while everything has a price. Propaganda is today called advertising. So, we are not 'forced,' but greatly pushed to buy. 'It is we who buy the goods,' but who really decides?"

For his part, WAISer Jordi Molins has supported Cameron Sawyer's preference of corporate control over government control: "I prefer a world where 'greedy corporates' induce us through ads to buy their products (I will try to educate myself in order to find the maximum amount of advertising traps, and make a decision by myself; and anyway, if corporations convince me, why is that wrong?) rather than a world with a government forces me, through the judicial system or worse, through the police / military system, to buy what is best for those in charge of the government (by using propaganda to try to convince me that this is for the good of the country)."

To me this view is totally wrong. It assumes that government is always evil and corporate search for profit is always good; and everyone should know by now that neither is always true. It is practically untenable and reveals a caveat emptor philosophy where consumers are forced to dedicate considerable time and attention to protect themselves against crooked business organizations rather than spend their time and energy performing their jobs and taking care of daily personal and family issues. It also implies that citizens cannot trust their governments to produce regulations to ensure free markets where consumers are protected from business fraud, including false advertising. This, in turn, implies a belief that democracy does not work because it is incapable of producing trustworthy governments. The reason democracy is so important is because it should provide the mechanism for people to choose their leaders, their government, and the rules and regulations for them to live by.

Returning to Cameron's points, he stated: "As far as free trade is concerned, again, it is you and I who are most concerned with it. The biggest companies would do very well without it--one important reason why free trade is generally a good thing. Free trade destroys oligopoly among domestic producers--a bigger market means broader competition, and competition is the only thing which keeps the interests of companies aligned with ours. Labor and big business might very well like a comfortable, controllable domestic market where they can squeeze the most out of us. We would still be the owners of big business, but the managers we employ would have a much easier life squeezing everything they can out of us in collusion with labor unions. Our standard of life would be lower. We like to buy cheap consumer goods from China because it improves our standard of life. I know very few members of the middle class who would like to be forced to pay 400% or 500% more for everyday consumer goods, in order to support some dying domestic industries. Note well--it is we who buy these goods; they are not forced on us by 'greedy corporations.' The manufacturing of ordinary consumer goods has been moving to China and other such markets for decades, and it has not led to any long-term increase in unemployment. The jobs lost in those industries have been replaced elsewhere. The long-term trend is towards an ever-increasing standard of living, despite certain short-term setbacks. We move up the economic food chain, to higher and higher value-added activities, leaving the dirty work to the Chinese and others."

While agreeing with most of Cameron's points regarding free trade, the difference in our positions seems to be philosophical in nature, and based on different perspectives and interpretation of evidence. I know from experience of the great benefits of incorporation, the fact that corporations can be and are used for good as well as evil. Further, I know of many small and large public and private business corporations whose behavior is socially responsible beyond the call of duty and reasonable expectations. We are in complete agreement that it is the legitimate (not greedy) objective of a business corporation to make a good profit for its shareholders (you, me, pension funds, etc.). We agree on the theoretical power and undeniable benefits of free trade. However, to me free trade should be my goods for your goods, not my jobs for cheaper (many times low-quality and even deadly) goods produced at lower cost by paying considerably less for already cheaper labor (in some cases slave labor), while concurrently avoiding regulations regarding pollution, labor laws, minimum wages, product quality, and so on. I strongly disagree with such irresponsible but unfortunately common corporate behavior.

It is true that "it is we who buy these goods; they are not forced on us by 'greedy corporations.'" However, there is no evidence to support some of Cameron's points: "The jobs lost in those industries have been replaced elsewhere. The long-term trend is towards an ever-increasing standard of living, despite certain short-term setbacks. We move up the economic food chain, to higher and higher value-added activities, leaving the dirty work to the Chinese and others." Cameron has been listening too close to the greedy corporation manifesto. Contrary to his opinion, the evidence seems to be that the Chinese people are doing well, some Chinese corporations are doing much better, and we Americans have not enough jobs, increasingly crappy jobs, and as a nation owe the Chinese a lot of money.

Last, Cameron stated: "I am saying all of this not because it proves anything, just saying it. I am just pointing out that not everyone shares the beliefs which underlie Tor's post. I would be most interested in having a substantive debate about the pros and cons of NAFTA, .. I think that at least a few intelligent people approve of NAFTA, and other free trade agreements." Indeed, many brilliant people love NAFTA, just not those who lost their jobs and saw entire towns disappear overnight. Further debate is always good, but the pros and cons of NAFTA is no longer based on beliefs and who has a better crystal ball. The evidence has been accumulating for some time, and unfortunately for the American middle class, the results are quite negative. The Mexicans have benefited greatly and so have many US companies close to the border. There are hundreds of reports addressing the topic.

JE comments:  Tor Guimaraes has eloquently summed up his positions on the biggest macroeconomic issues of our time.  Perhaps the debate boils down to this:  free trade is good as long as the fallout impacts the other guy.  I had a similar conversation yesterday with the owner of a zapatería in La Paz.  (Aldona found a shoe goldmine.)  Evo Morales's deep love affair with China has led to an influx of cheaper Chinese shoes, and guess what?  Bolivia's small producers have been driven out of business.  The shopkeeper had always sold Bolivian-made goods, but they are now in increasingly short supply.  Who benefits?  Evo's cronies and those on the take of Chinese largesse.

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