Too often, we villify corporations without looking at the context of the situation. To be sure, these multinational and coercive entities cause problems both at home and abroad. However, picking one enemy can sometimes risk ignoring other entities.
The most efficient engine for corporatism is actually the state. While corporations are private entities, corporatism is the unhealthy marriage between the state and said private entities.
Such an understanding is critical to the context of our attacks on unfair corporate practices. If we attack corporations, we ignore the enabler of the state. And, whenever you attack the corporation, you leave one root of the evil to spring back up again.
There are many methods this evil root takes to enable and facilitate the immorality of a private oligarchy. One common area is the "public-private partnership." These P3s as they are often called in theory combine the best of both worlds: the organizational power and oversight of the government with the implementation done by the power of the market.
However, this is a quite utopian view of the subject. In reality, A P3 destroys both the private entity and the state. It makes the state's interest conjoined with the private entity in profit-creation, which can distort the process of maintaining the rule of law in a monetarily driven world. It also corrupts the private entity. The private entity becomes focused on gaining ever more government contracts. Rather than innovating to compete, it becomes a leach on the government. It focuses on lobbying to create favorable support in Washington. The service becomes less important; the money becomes god. This in turn puts another bureaucratic burden on the government, which must support its branch. On P3s
Another area of government-private corruption is banking. We've all heard of the "golden parachute" for corporations. The fact is, a bailout is a type of golden parachute. However, more importantly in relation to this diary is the fact that the government takes a stake in the businesses through this means.
Now, please note I am not saying "nationalization". The problem I am specifically addressing is that bailouts are a half-baked methodology to have government take a stake in businesses. It leaves the basic workings of a company to the same failed business head, but injects yet another bureaucracy with override capabilities, much like with BofA's situation today. The problem here is it forces more "compromises" whith the private sector while once again eroding both agents of action. The bank must consider appeasing its governmental masters while also attempting to salvage its company. The government forces the company to take actions to uplift the macroeconomic situation of the nation, which can be detrimental to the company. During all this, the government becomes beholden to some interest to the company, a de facto agency in the government's work that also must be made viable to retain effectivity.
On bailouts and corporatism
Meanwhile, the banking institutions continue to funnel their money into lobbying and the political process. In the context of bailouts, this becomes even more significant. By lobbying congress, it can check the influence of executive intervention in its scenario, incentivizing further corruption and leaving the company's development stifled on politicking rather than competing.
It is important here to note the Federal Reserve in this context. The Federal Reserve is not federal in its design; it is private with governmental intervention. The president appoints the chairman and board of governors, to be true. But this board contributes only 7 of the actual policy-making part of the Federal Reserve. Regional banks have a significant say in the Federal Reserve's actions, and these regional banks take mandated interests from the public and private banks(a corporatist structure in itself). Member banks also deal with government obstruction alongside furthering their own interests within the government context, a further contradiction. In this context, the Federal Reserve must maintain profit for member banks while also maintaining economic stability in a macro sense.
The danger lies in the fact that the Federal Reserve, so influenced by banking interests, is also charged with our monetary and financial stability. It has de facto power to make money, and under new regulatory plans from President Obama will be gaining more power on top of emergency powers assumed from the financial crisis.
Finally, the defense sector is the clearest example of corruption in government-private sector cooperation. Whether it is Iran-Contra or Iraq, private players are seen everywhere.
In Iran-Contra, the CIA used private players once involved in the defense apparatus of America to enact its corrupt plans. These big-money players allow the government to bypass restrictions that can become irrelevant to their original goal of reining in adventurism.
In Iraq, it becomes more clear. Abu Ghraib had defense contractors heavily involved in its processses. These defense contractors came in encouraging "Gitmo-style interrogation", a pseudonym for torture. These defense contractors were protected by their firm from prosecution. Of course, we've all heard of the abuses of Blackwater.
Yet these isolated examples are not so isolated. There is an entire world of defense contracting, whether it is Lockheed Martin or upcoming Mantech International, they spring up everywhere. They often are made by players who left government and know how to "play the game" to get contracts.
This is the problem. Results are only required insofar as they can abet the securing of contracts. Sometimes, connections count much more than results. For example, one program developed to integrate the DHS and better secure systems throughout government by sharing information is no longer used, even though the program developed was quite expensive.
Essentially, our defense apparatus has been outsourced. Yet at every step of the way, this must not be seen as the "market" at work or the state's heavy hand in play. Instead, it is the crux of the problem: Both the market and the state are interacting, and playing upon each other. Instead of bringing out the best, they bring out the worst.
This is truly corporatism in action. Whether it is state corporatism of the USSR or societal corporatism of the USA, we can see that the dangerous marriage between the state and corporations is at play today.