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5 SUPER CAPITALISM, SUPER
IMPERIALISM PART 1: A
Structural Link By Henry C K
Liu
exploit workers in all trading
nations, including those in the US. It is a policy
that devalues work by over-rewarding financial
manipulation.
Yet to Reich, the US
corporate income tax is regressive and inequitable
and should be abolished so that after-tax
corporate profit can be even further enhanced.
This pro-profit position is at odds with even
rising US Republican sentiment against
transnational corporations and their global trade
strategies. Reich
also
thinks the concept of corporate criminal liability
is based on an "anthropomorphic fallacy" that ends
up hurting innocent people. Reich sees as
inevitable an evolutionary path towards an
allegedly perfect new world of a super-energetic
capitalism responding to the dictate of
all-powerful consumer preference through market
democracy.
Reich argues that corporations
cannot be expected to be more "socially
responsible" than their shareholders or even their
consumers, and he implies that consumer preference
and behavior are the proper and effective police
forces that supersede the need for market
regulation. He sees corporations, while viewed by
law as "legal persons", as merely value-neutral
institutional respondents of consumer preferences
in global markets. Reich claims that corporate
policies, strategies and behavior in market
capitalism are effectively governed by consumer
preferences and need no regulation by government.
This is essentially the ideology of
neo-liberalism.
Yet US transnational
corporations derive profit from global operations
serving global consumers to maximize return on
global capital. These transnational corporations
will seek to shift production to where labor is
cheapest and environmental standards are lowest
and to market their products where prices are
highest and consumer purchasing power the
strongest. Often, these corporations find it more
profitable to sell products they themselves do not
make, controlling only design and marketing,
leaving the dirty side of manufacturing to others
with underdeveloped market power. This means if
the US wants a trade surplus under the current
terms of trade, it must lower it wages. The
decoupling of consumers from producers weakens the
conventional effects of market pressure on
corporate social responsibility. Transnational
corporations have no home community loyalty.
Consumers generally do not care about sweat shop
conditions overseas while overseas workers do not
care about product safety on goods they produce
but cannot afford to buy. Products may be made in
China, but they are not made by China, but by US
transnational corporations which are responsible
for the quality and safety of their products.
Further, it is well recognized that
corporations routinely and effectively manipulate
consumer preference and market acceptance often
through if not false, at least misleading
advertising, not for the benefit of consumers, but
to maximize return on faceless capital raised from
global capital markets. The subliminal emphasis by
the corporate culture on addictive acquisition of
material things, coupled with a structural
deprivation of adequate income to satisfy the
manipulated desires, has made consumers less
satisfied than in previous times of less material
abundance. Corporations have been allowed to imbed
consumption-urging messages into every aspect of
modern life. The result is a disposable culture
with packaged waste, an obesity crisis for all age
groups, skyrocketing consumer debt, the
privatization of public utilities that demand the
same fee for basic services from rich and poor
alike, causing a sharp disparity in affordability.
It is a phenomenon described by Karl Marx as
"Fetishism of Commodities".
Marx's
concept of Fetishism of Commodities Marx
wrote in Das Kapital:[1]
The relation of the producers to the
sum total of their own labor is presented to
them as a social relation, existing not between
themselves, but between the products of their
labor. This is the reason why the products of
labor become commodities, social things whose
qualities are at the same time perceptible and
imperceptible by the senses … The existence of
the things qua commodities, and the value
relation between the products of labor which
stamps them as commodities, have absolutely no
connection with their physical properties and
with the material relations arising therefrom.
It is a definite social relation between men
that assumes, in their eyes, the fantastic form
of a relation between things. In order,
therefore, to find an analogy, we must have
recourse to the mist-enveloped regions of the
religious world. In that world, the productions
of the human brain appear as independent beings
endowed with life, and entering into relation
both with one another and the human race. So it
is in the world of commodities with the products
of men's hands. This I call the Fetishism which
attaches itself to the products of labor, as
soon as they are produced as commodities, and
which is therefore inseparable from the
production of commodities. This Fetishism of
Commodities has its origin … in the peculiar
social character of the labor that produces
them.
Marx asserts that "the mystical
character of commodities does not originate in
their use-value" (Section 1, p 71). Market value
is derived from social relations, not from
use-value which is a material phenomenon. Thus
Marx critiques the Marginal Utility Theory by
pointing out that market value is affected by
social relationships. For example, the marginal
utility of door locks is a function of the
burglary rate in a neighborhood which in turn is a
function of the unemployment rate. Unregulated
free markets are a regime of uninhibited price
gouging by monopolies and cartels.
Thus
the nature of money cannot be adequately explained
even in terms of the material-technical properties
of gold, but only in terms of the factors behind
man's desire and need for gold. Similarly, it is
not possible to fully understand the price of
capital from the technical nature of the means of
production, but only from the social institution
of private ownership and the terms of exchange
imposed by uneven market power. Market capitalism
is a social institution based on the fetishism of
commodities.
Democracy threatened by
the corporate state While Reich is on
target in warning about the danger to democracy
posed by the corporate state, and in claiming that
only people can be citizens, and only citizens
should participate in democratic decision making,
he misses the point that transnational
corporations have transcended national boundaries.
Yet in each community that these transnational
corporations operate, they have the congenital
incentive, the financial means and the legal
mandate to manipulate the fetishism of commodities
even in distant lands.
Moreover,
representative democracy as practiced in the US is
increasingly manipulated by corporate lobbying
funded from high-profit-driven corporate financial
resources derived from foreign sources controlled
by management. Corporate governance is notoriously
abusive of minority shareholder rights on the part
of management. Notwithstanding Reich's
rationalization of excessive CEO compensation,
CEOs as a class are the most vocal proponents of
corporate statehood. Modern corporations are
securely insulated from any serious threats from
consumer revolt. Inter-corporate competition
presents only superficial and trivial choices for
consumers. Motorists have never been offered any
real choice on gasoline by oil companies or
alternatives on the gasoline-guzzling internal
combustion engine by car-makers.
High
pay for CEOs Reich asserts in his Wall
Street Journal piece that modern CEOs in finance
capitalism nowadays deserve their high pay because
they have to be superstars, unlike their
bureaucrat-like predecessors during industrial
capitalism. Notwithstanding that one would expect
a former labor secretary to argue that workers
deserve higher pay, the challenge to corporate
leadership in market capitalism has always been
and will always remain management's ruthless
pursuit of market leadership power, a euphemism
for monopoly, by skirting the rule of law and
regulations, framing legislative regimes through
political lobbying, pushing down wages and worker
benefits, increasing productivity by downsizing in
an expanding market and manipulating consumer
attitude through advertising. At the end of the
day, the bottom line for corporate profit is a
factor of lowering wage and benefit levels.
Reich seems to have forgotten that the
captains of industry of 19th century free-wheeling
capitalism were all superstars who evoked public
admiration by manipulating the awed public into
accepting the Horatio Alger myth of success
through hard work, honesty and fairness. The
derogatory term "robber barons" was first coined
by protest pamphlets circulated by victimized
Kansas farmers against ruthless railroad tycoons
during the Great Depression.
The
manipulation of the public will by moneyed
interests is the most problematic vulnerability of
US economic and political democracy. In an era
when class warfare has taken on new
sophistication, the accusation of resorting to
class warfare argument is widely used to silence
legitimate socio-economic protests. The US media
is essentially owned by the moneyed interests. The
decline of unionism in the US has been largely the
result of anti-labor propaganda campaigns funded
by corporations and government policies influenced
by corporate lobbyists. The infiltration of
organized crime was exploited to fan public
anti-union sentiments while widespread corporate
white collar crimes were dismissed as mere
anomalies. (See Capitalism's bad apples: It's the
barrel that's rotten)
Superman capitalism As promoted
by his permissive opinion piece, a more apt title
for Reich's new book would be Superman
Capitalism, in praise of the super-heroic
qualities of successful corporate CEOs who deserve
superstar pay. This view goes beyond even fascist
superman ideology. The compensation of corporate
CEOs in Nazi Germany never reached such obscene
levels as those in US corporate land today.
Reich argues that CEOs deserve their
super-high compensation, which has increased 600%
in two decades, because corporate profits have
also risen 600% in the same period. The former
secretary of labor did not point out that wages
rose only 30% in the same period. The profit/wage
disparity is a growing cancer in
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