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We're living in unprecedented times, as the State and the corporation vie for power. Welcome to the brave new world.

The New World Order, Part I

We’re living in unprecedented times. The meltdown of the markets (or “the slow burn,” as some call it) has become a fact of life, and there is no indication the process is abating. The same with unemployment. A half a million layoffs every month is no longer an anomaly but something we’ve come to expect, like writing off a bad debt on the balance sheet, except that the write-off is a permanent one, an accounting gimmick to be employed until further notice.

Governments the world over are doing all they can to stop the avalanche and restore a sense of confidence in a system that until now had all the makings of bringing prosperity not just to the West, but the rest of the world. A stimulus package approaching a trillion dollars, the salary caps imposed on executive pay for companies asking for a bailout (and more corporate restrictions certain to come), the appeal to buy American and only American – all these are measures, desperate measures to bring the world economy back on track and reinstate a sense of order and yes, of hopefulness. Hopefulness that all is not lost, that we can still recover from this downward spiral which seems to have gripped us and rendered us impotent and helpless; that good times are still ahead.

Will it work? No one knows. It’s futile to argue about the efficacy of this program or that. Much of the dispute, anyway, over such matters as bailouts or  executive pay, has strong sentimental undertones. Understandably, there are many who don’t want to see America become a second-rate country; naturally, they’re clinging to the past.  In those rare instances when economic sense prevails, it’s no longer reliable: the past can no longer guide us or help us understand the unfolding events. The entire spectacle reminds me of a sinking Titanic while the passengers squabble over which compartment should be saved first.

I'd say that saving the ship is a more cogent idea. So let us ask: What are the structural deficiencies which seem to underlie our present condition so as to make the entire system fall apart at the seams? And here, the first thing I can think of is the concept of the corporation.

Not surprisingly, the literature of political science or political philosophy is pretty silent on the matter. Until recently, the relationship between the corporation and the state was, by and large, non-problematic. Even prior to the advent of corporations, in pre-industrial times, as far back, in fact, as you care to look, the world of business and commerce was never in conflict with, but always augmented, the interests of the state. The monarchs, from Queen Isabella to Elizabeth the Great, have been known to support and sponsor all manner of commercial and business enterprises. The mercantile era represents, perhaps, the pinnacle of that policy whereby the trading companies -– The East India Trading Company, most notably -– were virtually the arm of the British Empire bent on colonization and conquest. What the Portuguese or the Spaniards tried to accomplish by way of missions, the Dutch, the French, and the British did by means of trading outposts, trading agencies and trading companies.

The Industrial Revolution, though an important catalyst in the mushrooming of business ventures in the West, hasn’t altered the basic relationship of cooperation between business and national interests.  Corporate interests may not have been as responsive to the needs of the state as they were during the mercantile era, but were by no means opposed to them. In the worst case scenario, a number of key industries, such as the railroads or the utilities, could always be nationalized; and sometimes were.

By and large, the relationship between the business community and the state was one of peaceful coexistence. If anything, it was always the state which held the upper hand, always capable of bringing the world of industry to its knees. The rise of the Third Reich, which brought about the subordination of the major industries (Krupp, I. G. Farben) to the will of the state, or the Soviet experiment, which resulted in the thoroughgoing socialization of all economic endeavors under the auspices of the Five Year Plan, are the obvious examples of the state’s supremacy over the world of business, but these are rather extreme examples. A slap on the wrist, anti-trust legislation, even nationalization –- not to mention taxation, issuing incentives, or regulatory agencies (such as the FCC or the SEC), were the usual methods of ensuring compliance, and for the most part, they worked. And so it was until the eighties.

Indeed, even into the late seventies, such terms as “good corporate citizen” or “good will”  were part of the vernacular, a rather common currency, and understandably so. It was still considered in the corporations’ best interests to identify their goals with the well-being of the citizens and the nation: hence the PR. It all changed, and drastically, with the advent of the era of deregulation, mergers & acquisitions, and the birth of the global conglomerate. The rest is history.

I’m not going to discuss the issue of corporate morality or whether some such notion is applicable to an entity like the modern corporation. It’s a touchy question, one which is only liable to stir the mind and divert the discussion away from cool reasoning by infecting it with passions. For better or worse, corporations have the legal status of persons, although the relevant ways in which they might differ from true-life persons is a subject which, in my opinion, has not received adequate attention.  I shall focus instead on some of the detrimental effects of the global conglomerate; detrimental from the standpoint of the state and the best interests of its citizens. (It goes without saying that the forthcoming analysis presupposes the existence and the desirability of nation-states. It also presupposes long-term benefits, such as “spreading prosperity around,” of the capitalist system set aright. Take away either of these conditions and the entire argument is rendered null and void.)

I shan’t go beyond the much debated but still unresolved issue of outsourcing. Say what you will, but the practice did not generate as many jobs in the home country as it had lost; and given that our education system is in shambles, it’s unlikely it ever will.

It will serve no purpose here to affix blame. You certainly can’t fault the corporation for trying to maximize profit and make good on its obligation to stockholders while attracting potential investors. The state? Perhaps an argument could be made in terms of lowering corporate taxes and issuing tax credits for manufacturing at home, to say nothing of curbing the unions’ stronghold on some of the major industries. The consumer? Yes, perhaps we ought to have been more “patriotic,” in buying American and only American; but then again, how can we blame the consumer for not allowing patriotism, however well or poorly conceived, affect his or her economic decisions? It would seem thus that the entire practice, from the beginning, was a foregone conclusion and that only the most fortuitous set of circumstances could have averted its full-scale development. But as I said, it’s water under the bridge and finger pointing serves no discernible purpose. I’m after the effects.

But what are the effects? The loss of jobs; the lowering of morale, creating the impression that America has become a two-tier society of haves and have-nots, ever-increasing numbers on welfare rolls, and the added costs of providing basic medical services to all. Shall I go on?

One way or another, it all adds up to a bigger government having to provide a safety net for the growing many, the increasingly heavy burden on the steadily shrinking base of  taxpayers, the necessity for borrowing and falling deeper and deeper into debt, and so on and so forth. Say what you will, but it doesn’t bode well for our national interests to be creating a large underclass composed of all those who are increasingly dependent on their government for their subsistence and other needs. Couple these trends with the fact that the global conglomerate has effectively divorced itself from any and all allegiance to the home country, that it can change its headquarters or base of operations at will, that it can function thus with nearly total impunity, and it's obvious we have a problem on our hands. Is it any wonder the government gets bigger and more socialistic in its outreach? Yet the most vehement opponents of these, perhaps less-than-desirable responses fail to see them as the unintended consequences of the process at work. They’ll do anything -– rant, cast the first stone, resort to abusive language and ad hominem attacks -– anything but connect the dots.

It’s only a sketch, but I think the meaning is clear: we’re coming to a peak. Sooner or later, there will be a showdown between national interests and those of the business community, as their goals and objectives continue to grow more disparate by the minute —  to the point of becoming inimical. When that happens, something will have to give.

Let me restate the underlying thesis, lest it’s less than perfectly clear: when it comes to choosing between the power of the corporation and the power of the State, I’ll always choose the latter. There can be only one ultimate authority in a civil society, and that authority must reside in the political realm. Political institutions must trump all other concerns because they’re the ultimate guarantors of any and all legitimate activity, including economic pursuits, within the polity. In fact, only in political institutions, properly cherished and nurtured, can there be any hope of attaining justice in a civil society. If you have any doubts, just ask yourself what it would be like if the global conglomerate were to run the world. Unless you were one of the stockholders, the chances are your future would be very dim indeed.

A while ago, I made an innocent suggestion: “I think what we need [‘what may happen’ would be closer to my intention] is something analogous to Caesar crossing the Rubicon and restoring the reins of power – if that was his intention – to the Senate.  Drastic times call for drastic measures,” I concluded. (See “Iranian Nuclear Threat More Real Than Ever,” comment #259.) Needless to say, I was severely criticized just for entertaining the possibility of confrontation.

Fortunately, I’ve come to another realization since: a possible response on the part of the polity to accommodate the fact of thoroughgoing globalization -– legitimate and less violent than the one I had initially envisioned. Jason J. Campbell’s recent article, “Why There Should Be A Global Minimum Wage,” will serve as the point of departure. Look to the conclusion in Part II.

About Roger Nowosielski

I'm a free lance writer. Areas of expertise: philosophy, sociology, liberal arts, and literature. An academic at a fringe, you might say, and I like it that way.

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