The Ultimate Cold War

"I don't want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub." Grover Norquist

Humanity, since the rise of civilization, has been dominated primarily by political and religious institutions. Gradually a third major institution began to emerge, initially with vastly expanded trade resulting from Europe's Age of Exploration, then increasingly with the Industrial Revolution and now with highly integrated transnational global corporations. While, by the 18^th century it was common for European monarchs to turn to bankers such as the Rothschilds to finance their wars, the political power remained the province of the monarch.

In the early United States corporations were often viewed with suspicion because of their history in the establishment of a number of the colonies. The history of settling colonies with indentured servants, of misleading the poor of Europe to induce migration to the colonies and their remote control by English investors, all contributed to this distrust. As a result corporations were authorized for specific purposes, e.g. building roads or canals, and were sunsetted when the project was finished. The Civil War saw a vast expansion of the corporation to meet the demands of that war, especially in the building of railroads. After the war the building of the transcontinental railroad and a plethora of others, placed the corporation, as an institution, as a firm feature of the American economy. Indeed, it was a law suit between the Southern Pacific railroad company and Santa Clara County California, by way of a clerk of the court's titling of a case, that first introduced the notion that corporations were persons. Upton Sinclair's novel, The Octopus, dealt with the stranglehold the railroads had on California politics.

The Progressive movement of the late 19^th and early 20^th centuries was largely a political reaction to these new corporate kids on the power block. The revolt against the excessive freight rates these increasingly monopolistic railroads charged became a focus of the Grange and other progressive agricultural groups. Geographically, where we had progressivism then, the Midwest and the South, we now have conservatism. Could the vast increase in corporate farming have anything to do with this change?

The Muckrakers like Ida M. Tarbell whose detailing of the economic practices of John D. Rockefeller in her book History of the Standard Oil Company, revealed the corporate world of interlocking directorates. These directorates facilitated the corporate response to regulations and other common objectives.

All this economic activity engendered the rise of mammoth financial corporations such as that of J. P. Morgan who became so powerful that he, along with other financiers, hatched a foiled plot to overthrow the government of FDR by force shortly after he became president. In effect, the corporation had arrived as the third major force in humanity's organized life.

Following World War II the corporation became an increasingly global entity as a result of its fundamental requirement to grow. It is now beginning to challenge government, the last frontier for growth other than religion. Whether it seeks to privatize this institution for profit is yet to be seen, but it poses an interesting question.

In dealing with government or, as some prefer, the state, corporations have sought to control the state rather than directly administer it. Mussolini made clear that Italy under his governance operated in the interests of corporations. Recently the Chinese Ambassador asked a group of American economists to meet with him at his Embassy to discuss, as he put it, "Now that free market capitalism has failed what do you think of state capitalism?" In state capitalism the state sets the economic agenda by either owning major corporations (this happened briefly in this country when the U.S. government took over General Motors) or the state owns a controlling interest in the corporation. It will be interesting to see if, over time, the state succumbs to the corporation due in part to the fact that corporations are generally much more flexible the political units. Their governing boards may see opportunities for growth too tempting to neglect.

Corporations are single-mindedly focused on profit and it is imperative that they grow or they will perish. They, therefore, do not have to weigh as many factors in reaching their decisions as do governments, which is why China's government control of its capitalist economy is finding success while the Soviet Union's government controlled economy did not. As global capitalism seeks ever greater markets and merges into ever greater economic organizations with ever fewer people making the decisions, the corporation can outperform any government, which is why government is society's last defense against corporate takeover of the global economy. In my judgment, one need only ask why major transnational and global corporations meet annually in the Davos World Economic Forum or the G8 or G20 have their frequent summits. These are little more than meetings at which corporate interests are the focus.

The World Social Form, deliberately created as the people's offset to the corporate World Economic Forum, is attended by a relatively chaotic mass of multicultural humanity. The emphasis is on improving human life. This differs starkly from the relatively few, but powerful by invitation only, attendees at Davos. One need only compare these gatherings to see the dimensions of the struggle humanity is faced with as it seeks to deal with the enormous power that its collective brain has created, but which that collective brain has failed to control. We want to retain our humanity, but we continue to create a world hostile to that desire.

There are some proposed alternatives to the above scenario.

David Korten in his book Agenda for a New Economy recognizes the fundamental inadequacy of our current free market model, especially the deleterious effect of what he calls phantom wealth, that is, wealth that is detached from real objects and services. This is the immense wealth of the major financial institutions and of the wealthiest among us. One of his remedies is to tax this kind of wealth until it does not exist or is reduced to ineffectiveness. He also makes a case for smaller regional economies rather than national or global ones. His remains a capitalist economy, but highly regulated to generate an economy measured by values such as health, degree of education, elimination of poverty, etc., not by money.

Joe Stiglitz, a former director of the World Bank, in his book Making Globalizaatio Work, while fully cognizant of the profound failures of free market globalization, believes globalization can and must be made to work for human benefit.

Chris Hedges, former head of the New York Times Middle East Bureau and now prolific author on the sad, self-destructive nature of much of modern culture, has declared that he is now a socialist. Some of the best writing on the current social catastrophes that our economic and social practices are generating is being done bye socialists, notably Mike Davis' Planet of the Slums and Eric Hobsbawn's Age of Extremes. If and as I feel I have these adequately in hand, I may be able to expand on the matters addressed in this post.

Bob Newhard