Last summer I reviewed Charles Derber’s book People Before Profit, and commended him on teaching us an important lesson from history — that when corporations wield too much power, the consequences are disastrous for all but a tiny elite. Derber reminds us of the terrible era of the corporate “Robber Barons”, at the turn of the 20th century:
[US sovereignty] shifted from the people toward the large corporations and financiers. The new system of American government, essentially federalized democracy with a corporate logo was “a government by Wall Street, of Wall Street and for Wall Street.” As the robber barons integrated the economy from New York to California, they deformed democracy and unhinged the social order…The robber barons “overran all the existing institutions which buttress society…they took possession of the political government, the school, the press, the church.” Business, that is, began to absorb all of society into itself.
Drawing parallels to the present day, Derber goes on:
In today’s corpocracy…business and government forge an intimate relationship, both within the nation-state and the larger world order. In the new system, government still wields sovereign authority, but sovereign power has actually been transferred to a partnership increasingly dominated by the business sector.
Adam Cohen’s editorial in yesterday’s New York Times echoes Derber’s warning, describing a book written by Lincoln Steffens in 1904 called The Shame of the Cities, which laments the extent to which corporate interests corrupt governments and the democratic process:
What opened the door to public corruption, Steffens concluded, was the blurring of the line between business and government. The average American “deplores our politics and lauds our business,” Steffens wrote, and therefore wants more businessmen involved in government. But this impulse ignores what business is all about: generating profits. It is folly, Steffens argued, to expect businessmen to look after any interest broader than their own…In this age of Enron and Halliburton, of huge campaign contributions and reckless deregulation, [Steffens’] arguments about the corrosive effect of business on government feel up to the minute. Every bit as timely is its call to arms. Steffens believed, as his book title makes clear, that the shame of corruption lay not with those who engaged in it, who could hardly be expected to act otherwise, but with the cities, which is to say their citizens, for not actively stepping in and putting a stop to it.
So while Derber’s call goes beyond activism and advocates a change to corporate charters, campaign finance reform and a ‘firewall’ between government and corporations, Steffens’ call one century earlier was a more modest call for greater citizen vigilance — a simple refusal by citizens to re-elect or put up with governments that obviously pandered to corporate interests above citizens’.
These different perspectives speak volumes about the changes to education and the social fabric of the West in the intervening century. At the turn of the 20th century, America was still a country proud of its revolutionary recent past, and a country that, shortly thereafter, would rally around labour union leaders and suffragettes to demand equality for all Americans in the political process, and ultimately oust the corrupted politicians who stood in the way of these sacred democratic principles. Though it would take the agony of the Great Depression to finally get there.
A century later, calling for revolution is no longer patriotic — it is more likely to get you branded a terrorist under the ironically named Patriot Act. Although the corrupting influence of large corporations is every bit as evident today as it must have been a century ago, there are very few standing up for the rights of citizens and decrying the evils of concentration of power. In denial of the basic inevitability of the corporate model — the concentration of more and more power and wealth in fewer and fewer hands — the poor, the unemployed and the destitute actually feel ashamed, and personally responsible, for their plight, rather than angry and victimized. Our education system has now joined the ranks of corporatist handmaidens, brainwashing our young people to believe that economic growth and unrestricted trade are inherently good and government and regulation are inherently bad.
Brad DeLong’s dot-com-era paper on the Robber Barons draws the parallels well. And Derber’s book clearly describes what is needed to correct the imbalance:
What will it take, this time around, to bring about these critical changes, when today’s corporate-owned political parties are moving America, and to a lesser extent the rest of the West, in exactly the opposite direction? Will it take more deaths of demonstrators in the streets, fighting for the rights of ‘ordinary citizens’, or another Great Depression brought about by reckless deficit financing, currency speculation and corporate greed? What will it take for us, finally, to learn the important lessons of history, and stop repeating our mistakes?