Corporation Nation, page 1
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CONTENTS
Title Page
Copyright Notice
Epigraph
Dedication
Acknowledgments
Introduction by Ralph Nader
The New Problem with No Name
ONE: The End of the Century
TWO: The Curse of the Robber Barons
THREE: The Mouse, Mickey Mouse, and Baby Bells
FOUR: Companies That Run America
FIVE: Bye, Bye, American Pie
SIX: The Making of the Corporate Mystique
SEVEN: Reinventing the Mystique
EIGHT: The Dependent Corporation
NINE: Five Reasons Americans Don’t Think About Corporate Power and Why They Should
TEN: How to be Politically Hopeful for the Next Century
ELEVEN: Why You Shouldn’t Be Liberal or Conservative
TWELVE: What’s Right and Wrong with Corporate Responsibility
THIRTEEN: How to Be Against Corporate Power and For Business
FOURTEEN: The Global Populist
FIFTEEN: The Four Movements to Join
SIXTEEN: Why Personal Responsibility Is Not Good Enough
Epilogue: What You Can Do Now
Notes
Index
Praise
Copyright
I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country … corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed.
—Abraham Lincoln, 1864
To
My Father and Mother
who inspired my principles and my love of life
Morrie Schwartz
whose sunny love in life and triumph in death
brightens all my days
and
Elena
for whose strength, nurturance, and heroic perseverance
I am in loving awe
ACKNOWLEDGMENTS
I am grateful to all the scholars and critics of the corporation who came before me, my colleagues and friends who sustained me, and all the activists around the world who are working to make possible a new world. I am indebted to the participants of a Boston seminar on the corporation, including Tim Costello, Richard Grossman, June Sekera, Charles Edmunson, Severyn Bruyn, Kent Greenfield, Elly Leary, Debra Osnowitz, Yale Magrass, S. M. Miller, and Michael Bettencourt. Grossman and Costello helped me rethink some of my basic assumptions; Osnowitz, Magrass, and Miller read the entire manuscript and gave me valuable substantive and editorial feedback; Greenfield read parts of the manuscript and helped guide me in legal thinking and critique; Edmunson inspired me as an employer-owner who walked the talk and Leary as a labor historian and organizer whose keen thinking and passion for justice burned bright; and Bruyn deepened my vision at every level, from local to global.
My colleagues in the Leadership for Change Program at Boston College helped nurture my belief in—and entertained my skepticism about—democratic change arising from within the corporation itself. These include Severyn Bruyn, Paul Gray, Joe Raelin, Eve Spangler, Bill Torbert, Sandra Waddock, Judy Clair, Charles Edmunson, Laury Hamel, Robert Leaver, Charlene O’Brien, Neil Smith, Steve Waddell, Lynn Rhenisch, and Leah Egan. I also want to thank Steven Piersanti for his own contributions to corporate responsibility and his close reading and comments on the manuscript, as well as Noam Chomsky, David Korten, Howard Zinn, and Paul Levenson for their intellectual and personal inspiration.
Numerous undergraduate and graduate students were a captive audience for various drafts of this work, and their insights and suggestions made this a much better book. Thanks also to Eunice Doherty, Brenda Pepe, and Roberta Negrin for their office and personal help at Boston College. I also want to express gratitude and enthusiasm for the legion of new populist activists, including David Lewit and the thousands of hopeful citizens joining the Alliance for Democracy, Chuck Collins and his crusaders for equality at United for a Fair Economy, and Tim Costello and all the labor activists committed to making the labor movement a social movement again.
I am deeply grateful to my editor, Cal Morgan, for his excitement about the ideas, for the extraordinary attention he gave to the manuscript, and for the gift of his expert editorial skills.
I cannot express adequately my gratitude to my friends and colleagues, David Karp and John Williamson, who read and commented on the manuscript, indulged my obsessions, and supported me all along the journey. While my dear friend Morrie Schwartz died before this work appeared, his faith in me, belief in the importance of the ideas presented here, and merry, loving presence—which has now touched millions of people—were a daily blessing.
Only Elena fully understands the meaning of living with a writer obsessed. Her close reading and critical commentary on the manuscript, which helped shape both the substance and style of the work, as well as her loving support, made this book possible.
INTRODUCTION by Ralph Nader
The controlling power in any society strives to make sure that, one way or another, its dark sides are not part of the mainstream public dialogue nor are they part of the perceived explanation for that society’s structural shortfalls and injustices. The modern large corporation is, as lawyer William Gossett, former vice president of Ford Motor Company wrote forty years ago, the dominant institution in our country. In the subsequent years, ask yourself how the traditional countervailing powers have fared vis-à-vis these giant multinational companies which command the global heights of power these days. Trade unions are weaker and on the defensive. The media is being scooped up by the conglomerates. The courts are under attack whenever they act, under the tort laws, on behalf of wrongfully harmed people. The universities are rapidly being corporatized. The churches do not seem able even to challenge gross commercialism, including the exploitation of children by business. While much of the government, starting with cash register elections, has become increasingly a wholly owned subsidiary of Big Business and a bazaar of accounts receivables for demanding corporate Welfare Kings.
Abroad, these corporations blithely cut deals with dictators or bring financially strapped governments into an indentured-debt status both directly and through allied agencies, such as the IMF and the World Bank, that reflect the corporate model of economic policy. More recently, the autocratic system of global governance called the World Trade Organization moves the subordination of domestic health, safety, and environmental policies beneath the supremacy of international commerce into a newly regressive dimension.
This is not to say that the media totally ignores stories about corporate crimes, frauds, and other abuses. While much more coverage of such public damage is needed, even the network television stations and print publications provide citizens with enough for a wake-up call. These stories are conveyed anecdotally (as they need to be for communications purposes), but rarely are they aggregated and given organized meaning about what basic changes are necessary to prevent repetitions and to allow our country and its peoples to fulfill their human possibilities.
Instead, such exposés can lead to a publie fatalism that nothing can be done because repeatedly there is no corrective follow-through by the affected institutions. These multiple disconnects are reflected in political campaigns whose candidates read major page one stories in the Wall Street Journal or the New York Times about serious corporate misbehavior and then continue with the language of avoidance on the hustings by ignoring their context. Historically, commercial carriers, from the ancient moneylenders to today’s corporations, have known few voluntary boundaries to their avarice. Every major religion has warned about this monistic drive for profitable gain. Thomas Jefferson, Abraham Lincoln, and many other of our forebears have done likewise. But when the culture itself becomes a corporate culture, we “grow up corporate,” accepting corporate assumptions about most things ranging from the designs of cars to the corporate control of other peoples’ properties to the definitions of military policy to restrictions on the very meaning of words (“violence” excludes corporate violence, “crime” excludes corporate crime, “welfare” excludes corporate welfare, for example). When we “grow up civic,” the broader social values beyond the firm’s mercantile ones achieve visibility and power. Past reform movements, including those of the farmers and industrial labor a century or more ago, changed significantly the country’s laws, policies, and ways of judging what is permitted and not permitted for the exercise of corporate power. The coal industry, for instance, had to be brought to some higher standards in the way it treated coal miners by the emergence of the United Mine Workers, and the late sixties’ drive for coal mine health and safety laws. While coal mining is still a dirty, hazardous occupation, it is much less so than the conditions formerly obtaining in the industry, which between 1880 and 1980 cost as many lives (from mine collapses and black lung disease) as those lost by the United States in World War II.
What a vibrant democratic civic society tells the business world is that in the process of generating wealth and lucrative executive compensation, it cannot continue to foist its terrible costs onto workers, consumers, the taxpayers, and the community environment. In the ebb and flow between corporate power and civic response, of old and new technology, of new pools of capital and of changing and more demanding public expectations, new arrangements, new institutions, and greater deconcentration of corporate power and separation of company and state are needed.
Charles Derber’s Corporation Nation makes these broad continuums and horizons available to readers by applying both the microscope and the telescope to this phenomenon of corporate giantism over historical time. Close observers of corporations can admire this book for covering so many of the important topics; for the interesting detail about how many corporate decisions adversely effect everyday lives; for unveiling the corporate mystique arising out of daily propagandistic, controlling processes; for not ignoring the benefits of business energies; and for giving the citizens leads to participate in movements and actions that can elicit the “public accountability” from state-chartered corporations, as originally envisioned by the states early in the nineteenth century.
There seems to be an awakening and heightened sensitivity about the concentration of too much power and wealth in too few hands. This is discernable both among some conservative and liberal groups and commentators in recent years—witness the joint reactions to savage video programming for children or the spread of corporate welfare. Witness also the joint actions between organized labor and consumer, environmental, and church groups regarding the growing activities and powers of the World Trade Organization. Professor Derber’s aptly named Corporation Nation is a luminous contribution to this emerging enlightenment.
The New Problem with No Name
A generation ago, Betty Friedan wrote in her groundbreaking work The Feminine Mystique of “a problem that has no name.” Millions of housewives with two children in white-picket-fenced houses, she argued, were living out lives of quiet desperation, with no words to communicate their suffering and no sense that they had a right to be anything but grateful for the golden lives mid-century America had bestowed upon them.1
Today, most Americans, both male and female, face a different unnamed problem. A mother in Hartford, Connecticut, says, “My son is with Aetna, and he frequently gets transferred back and I said, ‘Gee, they’re great, they’re doing so much for you,’ and he said, ‘Yeah, Mom, until they lay me off.’”2
As she goes on to say about her son’s life, “That’s a horrible way to have to live.”3 This new problem without a name is creating feelings of powerlessness and insecurity in millions of Americans. Even those fortunate enough to have well-paying corporate jobs sense their lives becoming precarious, vulnerable to a bewildering array of forces beyond their control. Who is responsible for their plight? Can anyone fix it? They are no longer certain.
In my own university, now being “reengineered,” a secretary tells me that, as an employee, she feels like one of the women Friedan described in the 1950s. She says that there is a growing sense of vague, unspoken apprehension among the office staff. While the university says it does not want to fire people, she and her fellow secretaries don’t know what to expect. She describes herself as at loose ends emotionally, lashing out uncharacteristically at coworkers, and sinking periodically into feelings of depression, acute frustration, and anger.
Many Americans today are like the women described by Friedan who asked themselves, “Why am I so dissatisfied?” And millions resemble other women of that period who were in denial, “sure they had no problem,” even though they struggled with feelings of insecurity, powerlessness, and sometimes desperation.4
Without a clear sense of who is responsible for their troubling feelings they have little sense of whom to confront, or turn to, about them. They feel at once grateful for what they have—and guilty for feeling otherwise. They have a nagging sense that something is wrong with their lives, yet they have no clear language for expressing it—and no vision of how to change it.
Today’s problem with no name bears many similarities to the problem Friedan discussed. It is, for one thing, veiled by a dominant social myth, analogous to the feminine mystique that Friedan dissected: the corporate mystique, as seductive, pervasive, and enduring a phenomenon as the feminine one that still lingers today.
The corporate mystique is a set of cherished beliefs and illusions at the very heart of American culture. We are all, in some measure, captives of the new mystique, which is at the root of the way we think about the most important institutions in our society—chief among them corporations themselves. The corporate mystique dictates how we think about not only what corporations are and the importance of their roles in our lives, but what government and markets, business and democracy, and the good life are all about. It is the main recipe for how to live and think in a corporate world.
Yet the corporate mystique is, at heart, an ideology, which for decades has effectively disguised the rising power of corporations in our lives. Corporate ascendancy is emerging as the universal order of the post-communist world. Its most obvious feature is the reign of vast and much-admired global corporations, from General Electric to Microsoft to Disney. Yet the essence of corporate ascendancy is the quiet shift of sovereignty that is shaking the roots of our democracy.
Corporate ascendancy refers to the rise of a new weakened form of democracy in which the powers of average Americans are being transferred to vast institutions with diminishing public accountability. With the government increasingly unresponsive to popular opinion, and corporations almost entirely unaccountable to the public, corporations have begun acquiring new public powers and acting as unelected partners with governments.
The first part of this book offers a new look at the emerging twenty-first-century corporate order. Our social landscape is now dominated by corporations that are bigger and more powerful than most countries. General Motors has annual sales larger than Israel’s Gross Domestic Product; Exxon’s annual sales are larger than Poland’s GDP. One hundred sixty-one countries have smaller annual revenues than Wal-Mart does. General Electric has hundreds of subsidiaries—giant companies such as GE Capital—which are themselves bigger than most nations.
Two hundred corporations, led by giants such as GE, Time Warner, and Philip Morris, dominate America’s economy—and much of the rest of the world. Their combined sales in 1996 were larger than the combined gross national product of all but the nine largest nations. Historians speak of the twentieth century as the age of nations and nationalism. Our end of century and the next century loom as the triumphal age of corporations.
America’s biggest companies—and some huge European and Japanese corporations—are an overwhelming force in our national politics. Corporations poured almost $2 billion into political campaigns in 1996 alone—only one of many measures of corporate political power. The relation between corporate power and democracy goes largely undiscussed in newspapers, schools, legislatures, and dinner conversations, as does the very nature of the corporation itself, a question that a hundred years ago was at the center of the national consciousness. It is a testament to the power of the corporate mystique that neither liberals nor conservatives have the vocabulary to raise these questions today.
In a rare effort by opinion makers to broach these issues, Ted Turner, founder of CNN and now a top executive in Time Warner, the world’s biggest media corporation, has publicly worried about the democratic implications of corporate concentration in media: “Media concentration is a frightening thing. It’s owned more and more by Disney, General Electric … Westinghouse, which now owns CBS. You have two of the four major networks owned by people that have huge investments in nuclear power and nuclear weapons—both GE and Westinghouse. What kinds of balanced story are they going to give you on the news about the nuclear issues?” Turner did not note that Time Warner is the second largest book publisher in the world, the largest music company, the owner of many of America’s most important magazines—including Time, Fortune, Life, People, Money, Sports Illustrated, and Martha Stewart Living—and, along with TCI, the owner of television cable systems serving 47 percent of the American cable audience. Turner is implicitly asking whether democracy can survive in a world dominated by companies such as his own.
