Introduction

from the book

Corporation Nation

by Charles Derber

St. Martin's Griffin, 1998

Introduction - The New Problem with No Name

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.

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.

Corporate ascendancy does not yet threaten to lead to absolute corporate power, but it involves the growing public powers of corporate entities that are defined by the corporate mystique as private enterprise. In addition to capturing huge global markets for traditional products, corporations are invading traditionally pubic sectors such as medicine, education, social services, and law enforcement. Corporations now own and manage huge domains of the public sector. To speak of the incorporation of America is not to speak metaphorically: There is scarcely any sphere of American life that is not coming under corporate administration.

The corporate mystique has helped to obscure not only the very question of corporate power, but how deeply personal the subject is. The personal identity of today's worker, consumer, and citizen is becoming a corporate construction. Corporations help create our growing obsession with money and success molding both our ~ morality and material lives. We get our dreams and opinions from J corporate-owned media such as Time Warner or Disney, our children's education from curricula provided by Microsoft or AT&T, our food from Philip Morris, the world's largest grocer, and our credit from one-stop corporate superbanks such as Citibank and Chase, but this insight only scratches the surface of corporate involvement in our lives. Every citizen has a place in the world of corporate ascendancy, including those not working in the corporation or not working at all. It is impossible to underestimate the extent to which one's own moral integrity and sense of self-respect stem from how one is situated in that world, and the extent to which most of us are involved as both agents and targets of corporate power.

In the past, corporations have served as a shelter from the cold calculus of the market, breeding loyalty and moral commitment among workers and consumers alike. Today, in our new era of greed, the corporation is rushing to shed the last vestiges of community within its walls. Downsizing, outsourcing, and permanent insecurity are the new dread mantras of the corporate world, and they are deeply personal in their impact. The new corporate "morality" is at the heart of a rising uncivil order, which is spreading into every corner of our lives a systemic and sometimes misplaced and abusive market logic. As each of us comes to terms with our unwitting dual complicity-both as perpetrators and victims of corporate abuse-our sense of personal and moral identity will never be quite the same.

The corporate order is undermining the security of American life as our parents knew it, along with the moral certitudes of loyalty and community they lived by. This is not an unambiguous loss; America at mid-century was for many a compromised and constraining place. But the new generation is growing up with an identity it would not have chosen: that of a permanently anxious class with contingency as its new moral code. As jobs have become temporary or otherwise contingent in the new corporate order, so have our communities and, increasingly, our marriages. The crisis of contingency has deeply seared our consciousness; it marks our personal lives with both new opportunities and terrible vulnerabilities. Both advocates and critics of the corporation ... have failed to appreciate how deeply corporate morality shapes personal morality, and has engendered today's crisis of values.

Students have often told me that they leave their sociology classes depressed because the sociological analysis they find there seems at once persuasive and without redemption. Social criticism has its role, but too often it has helped undermine itself in the United States by offering no solutions. Critics without constructive approaches get treated as Cassandras and reasonably dismissed as idealists or nihilists. No matter how compelling a critique, it will find little fertile soil if it offers no constructive solutions, no alternatives to inspire and involve them...

Today, the prospects of change are inhibited by both the vast power of the corporation and the enchantments of the corporate mystique, both of which have effectively removed the issue of corporate sovereignty from national consciousness. But in the Gilded Age, one hundred years ago, and half a century later in the New Deal, the question of the corporation and its moral responsibilities became the centerpiece of American politics, carried by strong populist and labor movements. Although the issue has been buried now for at least two decades, new conditions are arising that could elevate these concerns once again to the forefront of national political debate.

While there is much to learn from populism, New Deal liberalism, and American radical thought, they are inadequate as responses to today's problems. Among their great flaws is their tendency to confuse a critique of corporate ascendancy with an all-out assault on business as a social enterprise ... this approach has doomed virtually all American critics of the market order, and has created misleading notions about the change we need. We desperately need a challenge to the culture of greed, materialism, and manic consumerism that the new corporate order has bred. But there will be no solutions to downsizing, inequality, and the morality of contingency-and little hope for a more humane or democratic culture-in a world of declining or failing business. The changes we need must defend society against the new corporate assault- while at the same time protecting the health of business enterprise itself.

Positive populism starts with a recognition of the many benefits that the American corporation-and American business generally-has delivered. Visitors from around the world marvel at the consumer cornucopia that Americans enjoy, and flock to American shopping malls to buy goods that are either unavailable or vastly more expensive in their own countries. American corporations are among the most innovative and productive enterprises in history, and deliver unrivaled creature comforts to their huge consumer base...

The American public has historically rejected populism, in part because it has benefited handsomely from the success of the American corporation. Millions of Americans have been employed their whole lives by corporations and are understandably grateful for the standard of living they enjoy. While poor Americans and even many in the middle class haven't shared in the great corporate profit boom of the last two decades, they still can regard themselves as privileged compared to most of the world's population.

Even Karl Marx, their most famous foe, recognized the dynamism of the emerging corporations in his own time, and celebrated their coming as the precondition for a better life. Marx dedicated his life to a harsh critique of the new capitalist world in the making, but never forgot that the rising corporation was the engine of a radical new prosperity. Only corporate capitalism, he said, could liberate most of the world from centuries of feudal poverty and despotism, and open the door to the rule of law, individual rights, and opportunity. Marx was wrong about many things, but right in recognizing the deep contradictions involved in trying to humanize the rising market order. For even as corporations wreak havoc on the lives of millions of workers and communities here and all over the world, they are still global symbols of opportunity and the central engine of economic growth on which most Americans depend. Americans now harbor deep new grievances toward corporations. We feel betrayed by their frequently cold, calculated influence on our lives, and fear their growing power and wealth. But a new populism cannot take hold until it's demonstrated that it will not hurt business or the larger economy.

The realistic opportunities for change today lie in contradictory principles within contemporary business about how to remain competitive. While most large corporations have taken the same low road as their robber baron forebears a century ago, many of the same companies are seeking to empower employees, and to decentralize the huge bureaucracies that have traditionally protected corporations from public accountability. The new movements for corporate responsibility, while deeply flawed, hint that cooperation and economic democracy-core goals of positive populism- may ironically be emerging as necessary conditions of business success. Many sectors of business can find a place in the positive populist movement-which is not likely to succeed without their embrace.

Positive populism is a movement that affirms the virtues of business even as it seeks to humanize and democratize it. This creates many conundrums, for it is a movement which can succeed only by tapping the deep personal anger and hurt that corporations create among disposable workers and communities-without demonizing either corporations or their leaders. Positive populism seeks to encourage corporations to take the high road to social justice, but also recognizes that the new moral order we need will not always go hand in hand with maximizing profits.

The change we need will have to be championed by many sectors of the business world, but must be led by social movements whose values transcend making money and profit-including a newly assertive labor movement and vocal grassroots movements in communities across the nation. It must call on the strength of both "insider" and "outsider" populist forces-managers and shareholders seeking to democratize the business system from within, and populist labor and social movements acting from outside the corporation to preserve the ideals of democracy. Cooperation between insiders and outsiders is essential to positive populism, but their relation will be a difficult one, and their strategies not always harmonious. How to reconcile them is one of the great challenges of the twenty-first-century progressive agenda.

Since the crisis of corporate ascendancy is both economic and spiritual, so must be the movements that seek reform. Our nation is in need of a transformative movement, one that combines the forces of healthy business, energized workers and unions, and newly activist citizens, in the pursuit of a truly democratic culture. Deep economic and political changes are necessary to achieve corporate responsibility and a society that values people over money. What we need, finally, is a politics of the heart-but one that recognizes that we need more than changes of heart to create a new moral and truly democratic society.

Corporation Nation

Index of Website

Home Page