Corporations Are Not Humans : Not Even Close --Episode 25

 

                                         Democracy For Hire 

   Washington D.C.'s major growth industry consists of for-profit public-relations firms and business-sponsored policy institutes engaged in producing facts, opinion pieces, expert analyses, opinion polls, and direct-mail and telephone solicitation to create "citizen" advocacy and public-image-building campaigns on demand for corporate clients. William Greider calls it "democracy for hire." Burson Marsteller---the world's largest public relations firm, with net 1992 billings of $204 million---worked for Exxon during the Exxon Valdez oil spill and for Union Carbide during the Bhopal disaster. The top fifty public-relations firms billed over $1.7 billion in 1991.
   In the United States, the 170,000 public-relations employees engaged in manipulating news, public opinion, and public policy to serve the interests of paying clients now outnumber actual news reporters by about 40,000 ---and the gap is growing. These firms will organize citizen letter-writer campaigns, provide paid operatives posing as "housewives" to present corporate views in public meetings, and place favorable news items and op-ed pieces in the press. A 1990 study found that almost 40 percent of the news content in a typical U.S. newspaper originates from public-relations press releases, story memos, and suggestions. According to the 
Columbia Journalism Review, more than half of The Wall Street Journal's news stories are based solely on press releases. The distinction between advertising space and news space grows less distinct with each passing day. 

While the Republicans have long been known as the party of 
money, the Democratic Party was historically the party of the people, with strong representation of working-class and minority interests. The Democrats once depended heavily on their strong grassroots political organization ---on people more than money --- to deliver the votes on election day. These structures in turn forced politicians to maintain some contact with the grassroots and 
ensured a degree of local accountability. Ties to the party were strong. With the growing role of television in American life and the decline in the U.S. labor movement, costly television-based media campaigns have become increasingly central in deciding election outcomes. As a consequence, the grassroots organization that was once the foundation of the Democratic Party structure has 
disintegrated, causing it to lose its populist moorings and leaving those who once constituted its political base feeling unrepresented. 
   With the breakdown of this structure, those who run for office under the Democratic Party banner have become increasingly dependent on developing their own fund-raising organizations. This has left them more vulnerable to the influence of monied interests and greatly strengthened the hand of big business in setting policy agendas of both parties. William Greider maintains that the policy direction of the Democratic Party is now set largely by six Washington law firms that specialize in selling political influence to monied clients and in raising money for Democratic politicians. Working closely with Republicans as well, these firms are in the business of brokering power to whomever will pay their fees. This is the sorry state of American democracy.
   The Republican Party has responded most handily to the new circumstances, expertly adapting sophisticated techniques of mass marketing to the task of winning elections. With these techniques, it has accomplished the improbable task of exploiting the alienation of powerless citizens to build a populist political base in support of an elitist agenda. 

     As men of commerce, Republicans naturally understood marketing better than Democrats, and they applied what they knew about selling products to politics with none of the awkward hesitation that inhibited old-style politicians. As a result, voters are now viewed as a passive assembly of "consumers," a mass audience of potential buyers. Research discovers through scientific sampling what it is these consumers know or think, and more important, what they feel, even when they do not know their own "feelings." A campaign strategy is then designed to connect the candidate with these consumer attitudes. Advertising images are created that will elicit positive responses and make the sale. 


American democracy isn't for sale only to America's transnational corporations. The Mexican government spent upwards of $25 million and hired many of the leading Washington lobbyists to support its campaign for NAFTA. In the late 1980s, Japanese corporations were spending an estimated $100 million a year on political lobbying in the United States and another $300 million building a nationwide grassroots political network to influence public opinion. Together, the Japanese government and Japanese companies employed ninety-two Washington law, public-relations, and lobbying firms on their behalf. This compared with fifty-five for Canada, forty-two for Britain, and seven for the Netherlands. The purpose is to rewrite U.S. laws in favor of foreign corporations ---and it often works. 

Corporations Are Not Humans : Not Even Close---Episode 24

                             BUILDING BUSINESS LOBBIES

    Business roundtables are national associations of the chief executive officers (CEOs) of the largest transnational corporations. Whereas more inclusive business organizations such as national chambers of commerce and national associations of manufacturers include both large and small firms representing many different interests and perspectives, the members of business roundtables are all large transnational corporations firmly aligned with the economic globalization agenda. 

The first business roundtable was formed in the USA in 1972. Its 200 members include the heads of forty-two of the fifty largest Fortunate 500 U.S. industrial corporations, seven of the 
eight largest commercial banks, seven of the eight largest U.S. transportation companies, and nine of the eleven largest U.S. utilitites. In this forum, the CEO of DuPont chemical company sits with the CEOs of his three major rivals : Dow, Occidental Petroleum, and Monsanto. The head of General Motors sits with the heads of Ford and Chrysler---and so on with each major 
industry. In this forum, the heads of the world's largest U.S.-based corporations put aside their competitive differences to reach a consensus on issues of social and economic policy in America.  The U.S. Business Roundtable describes itself as : 

     an association of chief executive officers who examine public issues that affect the economy and develop positions which seek to reflect sound economic and social principles. Established in 1972, the Roundtable was founded in the belief that business executives should take an increased role in the continuing debates about public policy. { Fuck governments; they're too democratic.} 
   The Roundtable believes that the basic interests of business closely parallel the interests of the American people, who are directly involved as consumers, employees, investors, and suppliers . . . Member selection reflects the goal of having representation varied by category of business and by geographic location. Thus, the members, some 200 chief executive officers of companies in all fields, can present a cross section of thinking on national issues. 

   The Roundtable, surely one of America's most exclusive and least diverse membership organizations, has an unusually narrow notion of what constitutes a "cross section" of thinking on national issues. With few, if any, exceptions, its membership is limited to white males over fifty years of age whose annual compensation averages more than 170 times the U.S. per capita gross national product. Its members head corporations that disavow a commitment to national interests and stand to gain substantially from economic globalization. Once positions are defined, the Roundtable organizes aggressive campaigns to gain their political acceptance, including personal visits by its member CEOs to individual senators and representatives. 
   The Roundtable took an especially active role in campaigning for the North American Free Trade Agreement (NAFTA). Recognizing that the public might see free trade as a special--interest issue if touted by an exclusive club of the country's 200 largest transnationals, the Roundtable created a front organization, USA*NAFTA, that enrolled some 2,300 U.S. corporations and associations as members. Although US*NAFTA claimed to represent a broad constituency, every one of its state captains was a corporate member of the Business Roundtable. All but four Roundtable members enjoyed privileged access to the NAFTA negotiation process through representation on advisory committees to the U.S. trade representative. Roundtable members bombarded Americans with assurances through editorials, op-ed pieces, news releases, and radio and television commentaries that NAFTA would provide them with high-paying jobs, stop immigration from Mexico, and raise environmental standards.
   Nine of the US*NAFTA state captains (Allied Signal, AT&T, General Electric, General Motors, Phelps Dodge, United  Technologies, IBM, ITT, and TRW) were among the U.S. corporations that, according to the Interhemispheric Resource Center, had already shipped up to 180,000 jobs to Mexico during the twelve years prior to the passage of NAFTA. Some among the NAFTA captains were corporations that had been cited for violating worker rights in Mexico and for failing to comply with worker safety standards. Many were leading polluters in the United States and had exported to or produced in Mexico products that were banned in the United States. 

CORPORATIONS ARE NOT HUMANS : NOT EVEN CLOSE -Episode 23

                             BUYING OUT DEMOCRACY

   U. S. corporations entered the 1970s besieged by a rebellious anticonsumerist youth culture, a mushrooming environmental and product safety movement, and a serious economic challenge from Asia. Not only was their dream of global hegemony in tatters, they even risked losing control of their own home turf. In response, they mobilized their collective political resources to regain control ofthe 
political and cultural agenda. Their methods included a combination of sophisticated marketing techniques, old-fashioned vote buying, funding for ideologically aligned intellectuals, legal action, and many of the same grassroots mobilization techniques that environmental and consumer activists had used against the corporations during the 1960s and 1970s. Their campaigns were 
well funded, involved sophisticated strategies, and were professionally organized. The major goals of the corporate enemies were deregulation, economic globalization, and the limitation of corporate liability --- in short, to enlarge greedy, reckless corporate rights and reduce corporate responsibilities. And their campaign continues in full force in 2014.




      MOBILIZING CORPORATE POLITICAL RESOURCES

   In 1971, the U.S. Chamber of Commerce sought the advice of 
Virginia attorney and future Supreme Cort Justice Lewis Powell about the problems facing the business community. Powell produced a memorandum, "Attack on American Free Enterprise System," that warned of an assault by environmentalists, consumer activists, and others who "propagandize against the system, 
seeking insidiously and constantly to sabotage it." He argued that it was time "for the wisdom, ingenuity, and resources of American business to be marshaled against those who would destroy it." This set the stage for an organized effort effort by a powerful coalition for business groups and ideologically compatible foundations to align the U.S. political and legal system with their ideological vision. 
   Among Powell's recommendations was a proposal that the business community create a business-organized and-funded legal center to promote the general interests of business in the nation's courts. This led to the formation of the Pacific Legal Foundation (PLF) in 1973. Housed in the Sacramento Chamber of Commerce building, it was the first of a number of corporate-sponsored "public-interest" law firms dedicated to promoting the interests of their sponsoring corporations. The PLF specialized in defending business interests against "clean air and water legislation, the closing of federal wilderness areas to oil and gas exploration, workers' rights, and corporate taxation. " Some 80 percent of its income was from corporations or corporate foundations. 
  In a 1980 speech, PLF's managing attorney Raymond Momboisse turned reality on its head by attacking environmentalists for their "selfish, self-centered motivation . . . ; their ability to conceal their true aims in lofty sounding motives of public interest ; their indifference to the injury they inflict on the masses of mankind ; their ability to manipulate the law and the media ; and, most of all, their power to inflict monumental harm on society." 
   
 Business interests (Such as the John M. Olin Foundation) funded the establishment of law and economics programs in leading law schools to support scholarly research advancing the premise that the unregulated marketplace produces the most efficient---and thereby the most just --- society. Business funded all-expense-paid seminars at prestigious universities such as Yale and George Mason  to introduce sitting judges to these economic principles and their application to jurisprudence. 

Before the 1970s, business interests were represented by old-fashioned corporate lobbying organizations with straightforward names : Beer Institute, National Coal Association, Chamber of Commerce, or American Petroleum Institute. As aggressive public-interest groups succeeded in mobilizing broad-based citizen pressures on Congress, business decided that another approach was needed. 
   Corporations began to create their own"citizen" organizations with names and images that were carefully constructed to mask their corporate sponsorship and their true purpose. The National Wetlands Coalition, which featured a logo of a duck flying blissfully over a swamp, was sponsored by oil and gas companies and real estate developers to fight for the easing of restrictions on the conversion of wetlands into drilling sites and shopping malls. Corporate-sponsored Consumer Alert fights government regulations of product safety. Keep America Beautiful attempts to give its sponsors, the bottling industry, a green image by funding anti-littering campaigns, while those same sponsors actively fight mandatory recycling legislation. The strategy is to convince the public that litter is the responsibility of consumers ---not the packaging industry.
   The views of these and similar industry-sponsored groups --- thirty-six of them are documented in Masks of Deception : Corporate Front Groups in America---are regularly reported in the press as the views of citizen advocates. The sole reason for their existence is to convince the public that the corporate interest is the public interest and that labor, health, and the environment are "special" interests. The top funders of such groups include Dow Chemical, Exxon, Chevron USA, Mobil, DuPont, Ford, Phillip Morris, Pfizer, Anheuser-Busch, Monsanto, Proctor& Gamble, Phillips Petroleum, AT&T, and Arco. 
   Business interests funded the formation of new conservative policy makers who think in tanks such as The Heritage Foundation and revived lethargic pro-establishment tank thinkers such as the American Enterprise Institute, which experienced a tenfold increase in its budget. In 1978, the Institute for Educational Affairs was formed to match corporate funders with sympathetic scholars producing research studies supporting corporate views on economic freedom. 
   In 1970, only a handful of the Fortunate 500 companies had public affairs offices in Washington; by 1980, more than 80 percent did. In 1974, labor unions accounted for half of all political action committee (PAC) money. By 1980, the unions accounted for less than a fourth of this funding. With the inauguration of Ronald Reagan in 1981, the ideological alliance of corporate libertarians consolidated its control over the instruments of power. 
   Although many of those involved in these campaigns truly believe that they are acting in the public interest, what we are seeing is a frontal assault on democratic pluralism to advance the ideological agenda of corporate libertarianism. Though advanced in the name of freedom and democracy, this massive abuse of corporate power mocks them both.

CORPORATIONS ARE NOT HUMANS : NOT EVEN CLOSE ---Episode 22

                                                  A SELF-DESTRUCTING SYSTEM

   The global economic system is rewarding corporations and their executives with generous profits and benefit packages for contracting out their production to sweatshops paying substandard wages, for clear-cutting primal forests, for introducing labor-saving technologies that displace tens of thousands of employees, for dumping toxic wastes, and for shaping political agendas to advance 
corporate interests over human interests.  The system shields those who take such actions from the costs of their decisions, which are 
borne by the system's weaker members ---the displaced workers who no longer have jobs, the replacement workers who are paid too little to feed their families, the forest dwellers whose homes have 
been destroyed, the poor who live next door to the toxic dumps, 
and the unorganized taxpayers who pick up the bills. The consequence of delinking benefits from their costs is that the 
system is telling the world's most powerful decision makers that 
their decisions are creating new benefits, when in fact they are simply shifting more of the earth's available wealth to themselves at 
the expense of people and the planet. 
   System theorists, who concern themselves with understanding the dynamics of complex, self-regulating systems, would say that the economic system is providing the decision makers with positive 
feedback, rewarding them for decisions that upset the system's 
dynamic equilibrium and cause the system to oscillate out of control, risking eventual collapse. Stable systems depend on negative feedback signals that provide incentives to correct errant behavior and move the system back toward equilibrium. 
   The genius of Adam Smith's concept of a market economy is that although he never used the cybernetic terminology of the systems theorists, he was one of the first to recognize the basic  principles 
of a complex, self-regulating human system. Implicitly, he applied those principles to create an idealized model of a self-regulating economic system that would efficiently allocate society's resources to produce those things that people most want without the intervention of a powerful central ruler. It was a brilliant intellectual achievement and had enormous appeal to intellectuals 
who were attracted to elegant theories, to populists who had a deep distrust of powerful rulers --- and to propertied elites who found in it a moral justification for greed.
   Unfortunately, the economic rationalists who are Smith's intellectual descendants took a narrower and more mechanistic view of economic systems and embraced market freedom as an 
ideology, without Smith's focus on the conditions required to maintain the market's self-regulating balance. Ideologues make poor system designers because they are oriented to simplistic prescriptions rather than to the creation of balanced, self-regulating systems.

As resulting tensions mount and the system's failures become more evident, established political alignments are becoming increasingly strained. Capitalizing on a growing sense of public uncertainty and fear, political demagogues and opportunists are now having a field day. In the United States, they are attacking big government and environmentalists while calling for tax cuts, 
government downsizing, the restoration of family values and individual responsibility, the elimination of restrictions on natural resource exploitation, increased defense expenditures, a tougher stand on non-white collar crime, market deregulation, and free trade. Posing as conservatives committed to protecting ordinary people from the abuses of big government, they play 
simultaneously to the self-reliant, who distrust government ; to the economically burdened, who seek tax relief; to workers in resource-based industries, who fear environmental restrictions; and to corporate interests, which are eager for greater freedom to increase profits by externalizing costs. The proposals offered to attract these varied constituencies are rife with contradictions. Few, 
if any, of the proposals will contribute  to restoring the values of family, community, and self-reliance. To the contrary, they allow the world's largest corporations the freedom to colonize still more of the world's markets and resources to the benefit of the already rich, further shift tax burdens from those best able to pay to those least able to pay, and enlarge the police powers of the state to stem 
the resulting social unrest. 
   The opportunists and demagogues of corporate libertarianism have linked corporate money and power with populist interests to advance an agenda that results in placing corporate interests above human interests.  This contradiction remains unexposed as long as the corporate libertarians are allowed 
to define the issues as a struggle between tax-and-spend, big government liberals and family-values conservatives fighting for 
individual freedom and responsibility. In this guise, they have enjoyed great success in attacking social programs for the poor, providing tax breaks for the rich, and giving greater freedom to corporations. The consequence, however, is to shift still more 
power and wealth to the big and central --- the corporate world of the cloud minders --- at the expense of the small and local. Ironically, the cause that many conservative voters believe themselves to be serving is that of reclaiming power for THE SMALL and LOCAL.

The terms of the political debate must be redefined to focus clearly on the real issue : the contest for power between the big and central and the small and local --- between corporations and ordinary people. The time is ripe for a realignment of political alliances, which is likely to come into full flower only when the true populists realize that their enemy is not only big government but 
also the giant corporations that owe no allegiance to place, people, or human interest.

   Economic globalization is the foundation on which the empires of the new corporate colonialism are being built. The corporate libertarians tell us that the process of economic globalization is 
advancing in response to immutable historical forces and that we have no choice but to adapt and learn to compete with our neighbors. It is a disingenuous claim that belies the well-organized, generously funded, and purposeful efforts by the cloud minders to dismantle national economies and build the institutions of a global market. 
   

CORPORATIONS ARE NOT HUMANS : NOT EVEN CLOSE _Episode 21

                                                       A DIFFERENT WORLD 

   When Alexander Trotman assumed the post of chairman, president, and CEO of Ford Motor Company in 1993, he was responsible for making more than 3 million vehicles a year. Yet he did not own a car of his own and had never bought one from a dealer. Ford, as is common practice in the auto industry, provides all its top executives with new cars --- ensuring that they always have cars that are in perfect working order without ever having the unpleasant experience of negotiating with a dealer and hassling 
with registration, insurance, repairs, and maintenance. 
   In 1989, Lone Star Industries took a $271 million loss. Its CEO, James E. Stewart, ordered layoffs, sold off $400 million of corporate assets, eliminated the dividend to stockholders, and told his managers to fly coach. Yet he maintained a $2.9 million expense account for himself and continued to commute in the 
corporate jet between his home in Florida and the company 
headquarters in Stamford, Connecticut. As CEO of RJR Nabisco, F. Ross Johnson built a palatial hangar in Atlanta to house the corporation's ten planes and twenty-six corporate pilots. Next door he built a three-story VIP lounge complex with mahogany walls, Italian marble floors, and an atrium with a Japanese garden. Ivan Boesky, the global financier (with a talent for obtaining info from 
the inside), was known to order eight entrees from the menu at the 
exclusive Cafe des Artistes, sample each, and then decide which he would eat. 
   In June of 1991, at the annual conference of the American Forum for Global Education inHartford, Connecticut, Ed Pratt, the chairman and CEO of Pfizer, Inc., a drug and medical products producer with annual worldwide sales of $7 billion, was an opening 
speaker. He received an award for his contributions to global education and shared his insights on educational needs with several hundred American educators, telling them that the education of young Americans must focus on giving them the greatest competitive edge in the new global economy. In his view, there was no time for unnecessary frills---such as studying foreign languages. 
He reported that in his travels around Pfizer's world operations, he found that everyone with whom there was any need to talk already spoke English. So he advised that the classroom hours that children in other countries spend learning English be devoted to teaching American students science and economics. 
   Nike, a major footwear company, refers to itself as a "network firm." This means that it employs 8,000 people in management, design, sales, and promotion and leaves production in the hands of some 75,000 workers hired by independent contractors. Most of the outsourced production takes place in Indonesia, where a pair of  Nikes that sell in the United States for $73 to $135 is produced by girls and young women paid  as little as fifteen cents an hour.  The workers are housed in company barracks, there are no unions, overtime is mandatory, and if there is a strike, the military may be called to break it up. The $20 million that basketball star Michael Jordan reportedly received in 1992 for promoting Nike Shoes exceeded the entire annual payroll of the 
Indonesian factories that made them. { Richard I. Barnet and John Cavanagh, Global Dreams : Imperial Corporations and the New World Order (New York : Simon and Shuster, 1994), pp. 325-29 } 
   When asked about the conditions at plants where Nikes are produced, John Woodman, Nike's general manager in Indonesia, gave a classic Stratos-dweller response. Although he knew that there had been labor problems in the six Indonesian factories making Nike shoes, he had no idea what they had been about. Furthermore he said, "I don't know that I need to know. It's not within our scope to investigate." 
   The Nike case is a striking example of the distortions of an economic system that shifts rewards away from those who produce real value to those whose primary function is to create marketing illusions to convince consumers to buy products they do not need at inflated prices. It is little wonder that many managers, like the Nike manager who avoided contact with Indonesian workers, prefer to avoid talking to too many people outside the elite circles. 
   It seems fitting that in 1993 the winner in the annual executive compensation package sweepstakes was master illusionist Michael Eisner, chairman of the Walt Disney Company, a corporation dedicated to the creation of fantasy worlds. Eisner's compensation package of $203.1 million equaled 68 percent of the company's total profits of $299.8 for that year --- surely ample to create a few 
personal illusions of his own. 
   
   This is the cloud world in which the architects of the global economic order live. For themselves and their corporations, local 
markets become too confining. No amount of wealth and power is enough. They must constantly push new frontiers, build new empires, and colonize new markets. There is good reason to conclude that people who are so isolated from the daily reality of those they rule are ill prepared to define the public interest. 

CORPORATIONS ARE NOT HUMANS : NOT EVEN CLOSE ---Episode 20

                                                               THE GREAT DIVIDE

   The gap that separates the world's rich and poor, both within and between countries, is unconscionable and growing. In 1992, the United Nations Development Programme (UNDP) dramatized the inequity by representing the world's income distribution with a graph in the shape of a champagne glass. 
   The 20 percent of the world's people who live in the world's wealthiest countries receive 82.7 percent of the world's income ; only 1.4 percent of the world's income goes to the 20 percent who live in the world's poorest countries. In 1950, about the time the commitment was made to globalize the development process, the average income of the 20 percent of people living in the wealthiest countries was about thirty times that of the 20 percent living in the poorest countries. By 1989, this ratio had doubled to sixty times. 
   Based on national averages, these figures represent disparities among countries and substantially understate the disparity among people. For example, all Americans are placed in the world's top income category, including the homeless, the rural poor, and the urban slum dwellers. When the UNDP estimated the global distribution based on individual incomes rather than on national averages, the average income of the top 20 percent was 150 times that of the lowest 20 percent.
   Even this figure masks the extreme inequity revealed when the incomes of the top 20 percent are desegregated. Although global data are not available, data from the United States illustrate the point. In 1989, the top 20 percent of American households had an average income of $109,424 a year. However, those households in the eightieth to ninetieth percentiles received, on average, a relatively modest $65, 900. Those in the top 1 percent averaged $559,795---receiving as a group more total income than the bottom 40 percent of all Americans. 
   Yet this is mere pocket change to Wall Street investment bankers such as Michael Milken, who in one year took home from Drexel 
Burnham a salary of $587 million for his labors in peddling junk bonds on Wall Street, and to the chief executive officers of America's major corporations and the top-earning celebrities. In 1992, Thomas F. Frist Jr., CEO of Hospital Corporation of America, led the pack of overpaid American executives with $127 million , nearly 780, 000 times the average per capita income of the poorest 20 percent of the world's people. {This is criminal. HCA peddles health care, not screw drivers or widgets.} The 1992 average take of the CEOs of the 1,000 largest corporations surveyed by Business Week was $3.8 million ---up 42 percent from the previous year. Furthermore, the gap between the pay of top executives and the pay of those who work for them is growing rapidly. In 1960, the average CEO of a major company received forty times the compensation of the average worker. In 1992, he (there were only two women among Business Week's top 1,000 CEOs) received 157 times as much. 
   These well-paid executives are, however, only pretenders to wealth compared with the wealth of those who live by the earnings of their investment portfolios. Forbe's "fortunate four hundred richest people in America" enjoyed an increase in their combined net worth of $92 billion between 1982 and 1993, bringing them to a total of $328 billion ---more than the combined 1991 gross national products (GNPs) shared by a billion people living in India, Bangladesh,  Sri Lanka, and Nepal. 
    Eager to assure its wealthy readers that their good fortune was not at the expense of others, Forbe's prefaced its inventory of the wealthiest Americans with the following caveat : 

     Aha ! Then the redistributionists are right. The rich have gotten richer. Yes and no. The truly rich may have gotten richer, but there's no evidence that their proportionate share of the nation's wealth has grown. The price of admission to the Fortunate Forbe's Four Hundred has increased approximately as much as the stock market, as measured by the Dow Jones index. The tremendous increase in the stock market --- which has rubbed off nicely on the super rich --- rubs off on every pension holder and shareholder in America as well . . . 
   Weep not for the rich. But don't get the dumb idea that they have gotten rich off the rest of us. 

   Surely there were some widow and pensioners of modest means among the beneficiaries of the stock market gains. However, the protestation of Forbe's that equity has been maintained is but one manifestation of the isolation of the Stratos dwellers and their belief that their world is the world. The 400 richest Americans may not have increased their share of total stock wealth, bt apart from stocks owned by pension funds,83.1 percent of the stock market wealth owned by American households is owned by the wealthiest 10  percent. Moreover, 37.4 percent of stock wealth is owned by the richest 0.5 percent.
   From 1977 to 1989, the average real income of the top 1 percent of U.S. families increased by 78 PERCENT, whereas that of the bottom 20 percent decreased by 10.4 percent.Thus the poorest among us became not only relatively poorer but also absolutely poorer. What these figures don't tell us is that these absolute decreases occurred in spite of the fact that those who were employed in 1989 were working longer hours than they had in 1977, and far more families had two people working longer hours than they had in 1977, and far more families had two people working full time as more women entered the workforce. For many U.S. families among the bottom 60 percent, even longer hours and an extra breadwinner were not enough to make up for the decline in wages. 
   The simple truth is that the Forbe'seditors and other Stratos dwellers are prone to ignore is that each time a major corporation announces a cut back of thousands of jobs, the stratos families get richer and the incomes of the thousands of workers whose jobs have been eliminated decline. It is part of an ongoing process of shifting wealth and economic power from those who are engaged in the production of real value to those who already have large amounts of money and believe it is their right to see that those amounts grow without limit, regardless of their own needs or productive contributions. 
   Is it possible for those who sip from the lip of the champagne glass to truly appreciate the lot of the vast mass of humanity that shares only the meager dregs that settle into the stem ? If they were to acknowledge that their own abundance is the cause of the plight of those so deprived, could any person bear the terrible moral burden ? There is substantial incentive to avoid facing such moral contradictions by maintaining the reassuring cultural illusions of Stratos. 

CORPORATIONS ARE NOT HUMANS : NOT EVEN CLOSE---Episode 19

                    ILLUSIONS OF THE CLOUD MINDERS 

"The Cloud Minders," Episode 74, of the popular science fiction television series Star Trek, took place on the planet Ardana. First aired on February 28, 1969, it depicted a planet whose rulers devoted their lives to the arts in a beautiful and peaceful city, Stratos, suspended high above the planet's desolate surface. Down below, the inhabitants of the planet's surface, the Troglytes, worked in misery and violence in the planet's mines to earn the interplanetary exchange credits used to import from other planets the luxuries the rulers enjoyed on Stratos. In this modern allegory, an entire planet had been colonized by rulers who successfully detached and isolated themselves from the people and the localities of the planet's surface on whose toil their luxuries depended.
   This imagery sounds familiar. How like our own world it is, where the rich and powerful work in beautifully appointed executive suites in tall office towers, travel to meetings by limousine and helicopter; jet between continents high above the clouds, pampered with the finest wines by an attentive crew ; and live in protected estates, affluent suburbs, and penthouse suites amid art, beauty, and protected environment. They are as isolated from the lives of ordinary people of our planet as those who lived on Stratos were insulated from the lives of the Troglytes. They too are living in a world of illusion, draining the world of its resources and so isolated from reality that they know not what they do, nor how else to live. 

                                      THE MAGIC MARKET

   The isolation of the rich and powerful is exemplified by the annual gathering of the directors of the World Bank and the International Monetary Fund (IMF). The following is an account by journalist Graham Hancock from one such meeting : 

     I had come to Washington, D.C. simply to attend the joint annual meeting of the Boards of Governors of the World Bank and the International Monetary Fund, two institutions that play a central role in mobilizing and disbursing funds for impoverished developing countries . . . The total cost of the 700 social events laid on for delegates during that singe week was estimated at $10 million. . . A single formal dinner catered by Ridgewells cost $200 per person. Guests began with crab cakes, caviar and creme fratche, smoked salmon and mini Beef Wellingtons. The fish course was lobster with corn rounds followed by citrus sorbet. The entree was duck with lime sauce, served with artichoke bottoms filled with baby carrots. A hearts of palm salad was also offered accompanied by sage cheese souffles with port wine dressing. Dessert was a German chocolate turnip sauced with raspberry coulis, ice cream bonbons and flaming coffee royale. . . Washington limousine companies were doing a roaring trade.

   At the same meeting that favored its delegates with $10 million worth of lavish meals and social events, Barber Conable, the former U.S. congressman and then recently appointed president of the World Bank, presented the following charge to the 10,000 men and women present : 

     Our institution is mighty in resources and in experience but its labors will count for nothing if it cannot look at our world through the eyes of the most underprivileged, if we cannot share their hopes and their fears. We are here t serve their needs, to help them realize their strength, their potential, their aspirations . . . Collective action against global poverty is the common purpose that brings us together today. Let us therefore rededicate ourselves to the pursuit of that great good. 

  If the delegates had indeed made an effort to look at their world through the eyes of the most underprivileged, they might well have lost their appetites. Take, for example, this simple interview with a sharecropper's child in nearby Selma, Alabama, by Raymond Wheeler of CBS TV : 

Q : "Do you eat breakfast before school ?"
A : "Sometimes, sir. Sometimes I have peas."
Q : "And when you get to school, do you eat ?"
A : "No, sir."
Q : "Isn't there any food there ?"
A : "Yes, sir."
Q : "Why don't you have it ?"
A : "I don't have the 35 cents."
Q : "What do you do while the other children eat lunch?"
A : "I just sits there on the side." (his voice breaking).
Q : "How do you feel when you see the other children eating ?" 
A : "I feel ashamed" (crying). 

Far from encouraging delegates to see through the eyes of the poor, the organizers of World Bank-IMF meetings take great care to shield them from the specter of poverty. 

   The World Bank and IMF are leading proponents of economic rationalism and free-market, export-led growth strategies.They have for years been lauding South Korea, Taiwan, Singapore, and Hong Kong as examples of success. Thus when the directors met in Bankok, Thailand, in October 1991, it was natural that the meeting served as a celebration of the recent "success" story of free-market, export-led growth in Thailand. 
   No expense or inconvenience was spared by Thailand's government to impress the delegates that Thailand had arrived as a full member of the elite club of newly industrialized nations (NICs). To ensure the desired impression, a shiny new convention complex was rushed to completion in downtown Bangkok to host the conference. Two hundred families were evicted from their homes to widen roads to and from the site. A nearby squatter settlement was leveled so that the delegates would not be troubled by unpleasant views of Bangkok's poverty. Schools and government offices were closed to limit traffic congestion and help the air of emissions so that delegates might rush with the least inconvenience, free of respiratory distress in their air-conditioned cars, between elegant cocktail parties and official dinners along routes chosen --- and walled off, where necessary --- to avoid disconcerting views of Bankok's slums. English-speaking engineers, doctors, and lawyers were pressed into service as drivers of the delegates ; nurses and teachers waited tables in the conference restaurants to ensure that instructions were understood and that no need of a visiting dignitary would go unmet. 
   Such cosmetic measures could only partially hide the reality that Bangkok, a once beautiful city, has been ravaged by the consequences of its development "success." Amid shining shopping malls, high-rise office buildings, and luxury hotels, filth and squalor abound. Three hundred thousand new vehicles are added to Bangkok's monumental traffic jams each year, slowing traffic to an average of less than ten kilometers (about six miles) per hour. On more than 200 days a year, air pollution in Bangkok exceeds maximum World Health Organization safety limits, and emissions are increasing by 14 percent a year.
   The World Bank-IMF meeting in Thailand was a fitting metaphor for the illusion within which the world's power holders live. The illusion is maintained in part through the construction of a life of luxury set apart in enclaves, and in part by self-justifying belief systems, such as corporate libertarianism, and by the adulation of wealth and the wealthy by the business press and a plethora of economic researchers and consultants. Most of all, it is maintained by the dysfunctions of an economic system that lavishes rich rewards on power holders for decisions that place terrible burdens on the rest of humanity. 

CORPORATIONS ARE NOT HUMANS : NOT EVEN CLOSE ---Episode 18

                         CORPORATIONS PLAY BY DIFFERENT RULES

   The publicly traded, limited liability corporation is capitalism's institutional form of choice because it allows the virtually unlimited concentration of power with minimal public accountability or legal liability. Actual shareholders, the real owners, rarely have any role in corporate affairs and bear no personal liability beyond the value of their investments. Directors and officers are protected from financial liability for acts of negligence or commission by the corporation's massive legal resources and company paid insurance 
policies. The same criminal act that would result in a stiff prison sentence, or even execution, if committed by an individual, brings a corporation only a fine --- usually inconsequential in relation to corporate assets and likely less than what it gained by committing the infraction. The prosecution of corporate executives for illegal corporate acts is extremely(and I mean extremely) rare. It is with good reason that William M. Dugger chracterizes the corporation as organized irresponsibility. 

   Few real people can begin to match the political resources that a large corporation ( Not even Mr. Gates or Mr. Buffett or the Sheik of Araby can match Exxon/Mobil or Walmart or British Petroleum or Dow Chemical or Monsanto and on and on .)  is able to amass in its behalf. Corporations may lack the right to vote, but that is a minor inconvenience, given their ability to mobilize hundreds of thousands of votes from among their workers, suppliers, dealers, customers, and the public, and to package millions of dollars in political contributions. 
   Left to their devices, corporations colonize markets and defeat the very mechanisms that theory tells us make the market work in the public interest. The limited liability, publicly traded corporation may be the favored institution of capitalism, but it is not a market institution. To the contrary, it is aggressively antimarket, because it works tirelessly to erode the essential conditions of the market's social efficiency.
   It is fully appropriate, therefore, that citizens view corporations with the same skepticism as did the early American settlers, granting corporate charters judiciously only to serve well-defined public purposes, setting clear rules for corporate function, holding corporations fully accountable for their actions, and barring them from political participation of any kind. 
   The owners and managers of corporations have the full rights of any citizen ---in their capacity as human being citizens ---to participate in defining public goals and policies. However, corporations are not people. They are alien to the ways of life, blind to the complex nonmaterial needs of human societies, and have no proper role in the political processes by which real people define the public interest and set standards for corporate conduct. 
   A corporate charter represents a privilege---not a right---that is granted by a government subject to the will of its people in return for the acceptance of corresponding obligations. It is up to the people who make up the electorate---not the fictitious persona of the corporation --- to define these privileges and obligations. We are learning through harsh experience that the survival of democracy depends on holding firmly to this principle. Democratic pluralism faces a paradox . During times of change, societies need to mobilize the full creative potential of their citizens in a way that can be achieved only under democratic pluralism. Yet it is in such stressful times that democratic pluralism seems least adequate and most susceptible to the certainty offered by the simplistic appeals of ideological demagogues. Instead of offering direction, democratic pluralism calls on people to find their own direction with a view to the good of the whole. Instead of certainty, it nurtures variety to the point of apparent chaos. These are its weaknesses, but also its genius. Democratic pluralism provides a framework within which each citizen contributes what he or she can toward addressing---in the context of family, community, and nation --- the countless changing needs faced by complex, dynamic human societies. Gradually, through a diffuse and chaotic social learning process, the lessons from countless innovations are distilled into changes in  local, national, and ultimately global institutions and policies. 

CORPORATIONS ARE NOT HUMANS : NOT EVEN CLOSE---Episode 17

      Sweden Regressed After The Defeat Of The Social Democrats

  After the 1976 defeat of the Social Democrats, Sweden's major industrialists played an active role in dismantling the "Swedish model" constructed by the Social Democratic alliance. The Swedish Employers' Federation rejected centralized wage bargaining, which had been one of the model's cornerstones, and allied itself with the Conservative Party. It also bankrolled think (thinking ?) tanks espousing a corporate libertarian economic ideology and conducted a major public-relations effort praising individualism and the free market while denouncing the Social Democratic state as oppressive and inept. This weakened the political apparatus of the state and its ability to define long-term policies.
   In 1983, Volvo chairman P.G. Gyllenhammar stepped in to fill the void by forming the Roundtable of European Industrialists, made up of the heads of the leading European transnationals, including Fiat, Nestle, Philips, Olivetti, Renault, and Siemens. The purpose was to define long-tern policies for the state and to serve as an international lobby to press for their implementation. 
   By the end of 1992, the richest 2 percent of Swedish households owned 62 percent of the value of the shares traded on the Stockholm stock exchange and 23 percent of all wealth in the country.  While the average Swedish household grew poorer from 1978 to1988, the richest 450 households doubled their assets. Unemployment had been below 3 percent when the Social Democrats were first voted out of office. It rose to 5 percent in 1992 and was projected to reach 7 percent, even though another 7 percent of the workforce was already in countercyclical retraining programs and public employment projects. 
 From the beginning, the Swedish model contained the seeds of its own destruction. It built a powerful financial elite whose interests were far removed from those of the majority middle class. It bred a sense of welfare complacency among the Swedish people and failed to instill in the younger generation an awareness of democracy's need to be continually re-created through constant citizen vigilance and political activism. And its prosperity had been built on the unsustainable exploitation of Sweden's natural resources of timber, iron ore, and hydroelectric power. 
 The Swedish experience reveals a lesson of fundamental importance: democratic pluralism cannot long survive extreme inequality. 

                     THE NEED FOR CREATIVE BALANCE 

   Communism established the hegemony of the state. Capitalism establishes the hegemony of of financial markets and the corporation. A healthy society is built on the balanced interaction of three distinct yet interlinked sectors of activity : civic, governmental, and economic. All are human creations and a given individual may participate in all three, yet the integrity of the whole depends on clearly distinguishing their roles and their legitimate sources of power. 

CIVIC : Less formally institutionalized than the other three sectors, the civic sector affords the greatest creative freedom to the individual to act from a sense of inner spiritual connection to life and community. The distinctive role of the civic sector is to generate, maintain, and renew the sense of meaning and the symbols of cultural identity that are the foundation of the coherence and integrity of a healthy society. An active civic sector is the conscience of the society, the source of its cultural vitality and renewal, and a counter to the abuse of power by governmental and economic institutions.

GOVERNMENT : Government is the sector to which the civic sector freely, but reluctantly, gives the authority to use coercive power in the public interest, including the power to confiscate property and to deprive a person of physical liberty and even to kill under the guise of law. By the exercise of this authority government carries out such essential functions as maintaining public order and national security, collecting taxes, and reallocating society's resources to maintain equity and meet other public needs. Government's distinctive competence is in reallocating wealth, not in creating it. Its power must be continually checked by an active civil society. 

ECONOMIC : The economic sector specializes in producing goods and services. Market economies respond to consumer demand. Markets are, however, ill-equipped to set society's larger priorities. Markets have no mechanism for preventing the unscrupulous from selling guns, drugs, and tobacco products to children, creating environmental damage, endangering workers, or for insuring the accuracy of product labels. They cannot maintain public streets, run schools for poor children, or mandate recycling. Nor do they distinguish between profits earned from the efficient production of goods and unearned profits gained by exercising monopoly power, externalizing costs, expropriating common property resources, or creating artificial demand for unnecessary and even harmful products. In each instance there is a need for democratically elected governments to establish boundaries of behavior acceptable to society. 
   
  Democratic pluralism melds the forces of the market, government, and civil society to maintain a dynamic balance among the often competing societal needs for essential order and equity, the efficient production of goods and services, the accountability of power, the protection of human freedom, and continuing institutional innovation. This balance finds expression in the regulated market, not the free market, and in trade policies that link national economies to one another within a framework of rules that maintains domestic competition and favors domestic enterprises that employ local workers, meet local standards, pay local taxes, and function within a robust system of democratic governance.
   In a healthy society the civic sector is appropriately considered to be the first sector as it is the arena of citizenship, individual expression, and democratic participation. At the same time, the health of a society depends on the vitality of all three sectors. Without the institutions of government and the economy the society will be lawless and impoverished. Since government is the body through which citizens establish and maintain the rules for all sectors, it is appropriately considered the second sector. The role of the economic sector is to serve society's needs as defined by people through their purchases, their choice of work, and the rules and priorities determined democratically through their participation in government. It is therefore properly subordinate to both the civic and governmental sectors and is appropriately designated the third sector. 

                     PLAYING BY DIFFERENT RULES

Contrary to popular myth, capitalist economies and market economies operate by different rules to different ends. The institutions of a capitalist economy are designed to concentrate control of the means of production in the hands of the few to the exclusion of the many. A capitalist economy is characterized by concentrations of monopoly power, financial speculation, absentee ownership, deregulation, public subsidies, the externalization of costs, and central economic planning by mega-corporations. 

   By contrast the institutions of a market economy, as envisioned by Adam Smith and described by market theory, are intended to facilitate the self-organizing processes by which people engage in the production and exchange of goods and services to create adequate and satisfying livelihoods for themselves and their families, A true market economy features human-scale enterprises, honest money, rooted local ownership, and a framework of democratically chosen rules intended to maintain the conditions of efficient market function ---including equity and cost internalization. It is a natural companion to democracy and a pluralistic society. 

EMMA AND THE OTHER PHILISTINES----Episode 12

             STILL TALKING ABOUT THE OH SO WONDERFUL SCENE AT THE COUNTY FAIR


        The fourth movement begins when both Emma and Rodolphe fall silent and the words from the platform where a special prize is now being awarded are heard in full, with commentary : "Rodolphe was no longer speaking. They looked at one another. A supreme desire made their dry lips tremble, and softly, without an effort, their fingers intertwined."
   "Catherine Nicaise Elizabeth Leroux, of Sassetot-la-Guerriere, for fifty-four years of service at the same farm, a silver medal ---value, twenty-five francs !. . ."
   "Then came forward on the platform a little old woman with timid bearing, who seemed to shrink within her poor clothes . . . Something of monastic rigidity dignified her face. Nothing of sadness or of emotion weakened that pale look. In her constant proximity to cattle she had caught their dumbness and their calm . . . Thus stood before these beaming bourgeois this half-century of servitude . . . 
  'Approach ! approach!'
  " 'Are you deaf ? ' said Tuvache, jumping up in his armchair ; and he began shouting in her ear, 'Fifty-four years in service. A silver medal ! Twenty-five francs ! For you ! '
   "Then, when she had her medal she looked at it, and a smile of beautitude spread over her face ; and as she walked away they could hear her muttering---
   "I'll give it to our cure' up home, to say some masses for me ! '
   "What fanaticism! " exclaimed the druggist, leaning across to the notary."
   
   The apotheosis to this splendid contrapuntal chapter is Homais's account in the Rouen paper of the show and banquet. "Why these festoons , these garlands? Whither hurries this crowd like the waves of a furious sea under the torrents of a tropical sun pouring its heat upon our meads ? ' . . . 
   "He cited himself among the first of the members of the jury, and he even called attention in a note to the fact that Monsieur Homais, druggist, had sent a memoir on cider to the agricultural society. When he came to the distribution of the prizes, he painted the joy of the prize-winners in dithyrambic strophes. "The father embraced the son, the brother the brother, the husband his consort. More than one showed his humble medal with pride, and no doubt when he got home to his good housewife, he hung it up weeping on the modest walls of his cot.
   "' About six o'clock a banquet prepared in the grass-plot of Monsieur Liegeard brought together the principal personages of the festivity. The greatest cordiality reigned here. Divers toasts were proposed: Monsieur Lieuvain, the King ; Monsieur Tuvache, the Prefect ; Monsieur Derozerays, Agriculture ; Monsieur Homais, Industry and the Fine Arts, those twin sisters ; Monsieur Leplichey, Ameliorations. In the evening some brilliant fireworks on a sudden illumined the air. One would have called it a veritable kaleidoscope, a real operatic scene ; and for a moment our little locality might have thought itself transported into the midst of a dream of the "Thousand and OneNights.' " 

     --------------------------------------------------------------------------

  "Today. . . a man and a woman, lover and mistress in one (in thought), I have been riding on horseback through a wood, on an autumn afternoon, under yellow leaves, and I was the horses, the leaves, the wind, the words that were exchanged and the crimson sun. . . and my two lovers." So Flaubert wrote on December 23, 1853, to Louise Colet, about the famous Chapter 9 of the second part, Rodolphe's seduction of Emma.
   Within the general frame and a scheme of the nineteenth-century novel, this kind of a scene was technically known as a woman's fall, the fall of virtue. In the course of this delightfully written scene the behavior of Emma's long blue veil --- a character in its own serpentine right --- is especially to be marked. {The scene can be said to be seen through the long blue veil of her amazon dress.} After dismounting from their horses, they walk. "Then some hundred paces farther on she again stopped, and through her veil, that fell slantingly from her man's hat over her hips, he face appeared in a bluish transparency as if she were floating under azure waves." So, when she is daydreaming about the event in her room on their return : "Then she saw herself in the glass and wondered at her face. Never had her eyes been so large, so black, of so profound a depth. Something subtle about her being transfigured her. She repeated, 'I have a lover ! a lover !' delighting at the idea as if a second puberty had come to her. So at last she was to know those joys of love, that fever of happiness of which she had despaired! She was entering upon marvels where all would be passion, ecstasy, delirium. An azure infinity encompassed her, the heights of sentiment sparkled under her thought, and ordinary existence appeared only afar off, down below in the darkness in the interspaces of these heights." And one should not forget that, later, the poisonous arsenic was in a blue jar---and the blue haze that hung about the countryside at her funeral.
   The event that gave rise to her daydreaming is briefly described but with one most significant detail :"The cloth of her habit caught against the velvet of his coat. She threw back her white neck, swelling with a sigh, and faltering, in tears,with along shudder and hiding her face, she gave herself up to him.
   "The shades of night were falling ; the horizontal sun passing between the branches dazzled her eyes. Here and there around her, in the leaves or on the ground, trembled luminous patches, as if humming-birds in flight had scattered their feathers. { Hmm, not sure what Flaubert was doing here, since hummingbirds do not occur in Europe.} Silence was everywhere; a mild something seemed to come forth from the trees; she felt her heart, whose beating had begun again, and the blood coursing through her flesh like a stream of milk . Then far away, beyond the wood, on the other hills, se head a vague prolonged cry, a voice which lingered, and in silence she heard it mingling like music with the last pulsations of her throbbing nerves. Rdolphe, a cigar in his teeth, was mending with his penknife one of the bridles that had broken." 
  When Emma has returned from love's swoon, you will please mark the remote note that reaches her from somewhere beyond the quiet woods --- a musical moan in the distance --- for all its enchantment is nothing but the glorified echo of a hideous vagabond's raucous song. And presently Emma and Rodolphe come back from their ride--- with a smile on the face of the author. For that raucous song here and in Rouen will hideously mingle with Emma's death rattle less than five years later.
   

CORPORATIONS ARE NOT HUMANS : NOT EVEN CLOSE---Episode 16

                GLOBALIZATION HAS CORROSIVE EFFECTS 

   Market mechanisms are essential to modern societies. However, for the market to serve the public good, business must recognize and accept the essential roles of government and civil society in maintaining the conditions on which the economic and social efficiency of markets depends, even though this may reduce corporate profits, limit the freedom of corporate action, and increase the prices of some consumer goods. The payoffs for society include good jobs that pay a living wage and protect the health and safety of the workers and the community, a clean environment, economic stability, job security, and strong and secure families and communities. 
   There will also be cases of government inefficiency, just as there are cases of corporate inefficiency. It is appropriate to reduce the costs of such inefficiency both to taxpayers and to business. It is also appropriate to ensure that increases in consumer prices do not make it more difficult for people of modest incomes to meet their basic needs. However, we should not be concerned when governmental intervention in the public interest makes it more costly to consume things that we may not really need, reduces excessive corporate profits, and gives corporations fewer freedoms than humans. 
   To play its essential role in relation to the market, a government must have jurisdiction over the economy within the borders of its territory. It must be able to set the rules for the domestic economy without having to prove to foreign governments and corporations that such rules are not barriers to international trade and investment. A government must be able to assess taxes and regulate the affairs of corporations that conduct business within its jurisdiction without being subject to corporate threats to sue for lost profits, withhold critical technologies, or transfer jobs to foreign facilities. For such jurisdiction to be maintained, economic boundaries must coincide with political boundaries. If not, government becomes impotent, and democracy becomes a hollow facade. When the economy is global and the governments are national, global corporations and financial institutions function largely beyond the reach of public accountability, governments become more vulnerable to inappropriate corporate influence, and citizenship is reduced to making consumer choices among the products that corporations find it most profitable to offer. 
   Domestic economies that favor locally owned businesses --- serving community interests in ways that foreign producers and footloose investors cannot ---- need not exclude imported goods and outside investors. Where a community finds benefits in foreign trade and investment, it should surely welcome them. But people have both the right and the need to be in control of their own economic lives through their own enterprises and the rules they set for themselves through their own democratically elected governments. If they wish to place economic speed bumps on their borders to create an advantage for local investment, they have every moral right to do so. Such a strategy worked for the Western nations during the post-World War II economic boom and resulted in the broad domestic sharing of economic benefits. 
   Sweden offers an instructive case-study of what democratic pluralism  was able to accomplish during the mid-twentieth century and of the dynamics that ultimately led to its breakdown in favor of rule by a small corporate and financial elite. 

                                 THE CASE OF SWEDEN 

   Sweden is known among the Western industrial countries for its success in achieving prosperity and equity through mixing elements of both capitalist and socialist models within a strong framework of democratic pluralism. Sweden's experience offers instructive insights into the dynamics of pluralism and the consequences of globalization. 
   Few realize that industrialization came a hundred years later to Sweden than to England. Until the years following World War II, Sweden remained an extremely poor country. In the countryside, many people lived on small farms that, given the poor soil and climate, barely provided them a living. Some died in famines or emigrated. Many others, even well into this century, lived in serf-like conditions on large estates. Illiteracy was widespread. In the late 1940s, it was still common for a family to live in an apartment consisting of one room plus a kitchen (toilet facilities were shared with other families). Even the Swedish royal house was relatively poor by the standards of its European cousins. 
   Sweden's modern success was a creation of the Swedish Social Democratic Party, which melded and sustained a national consensus that kept it in power for forty-four years, from 1932 to 1976. The Social Democrats built Sweden's elaborate social welfare system. Their wage policies brought working people into the middle class and created a substantial degree of wage equity ---including greater equity between the wages of women and men--than in any other Western country. The Social Democrats place a high priority on maintaining full employment. To encourage Swedish transnational firms such as Volvo, Electrolux, Saab, and Ericsson to concentrate their operations in Sweden, the applicable tax rate was much lower for profits generated in Sweden than for those generated abroad. 
   An alliance between the major Swedish industrial corporations and organized labor served as the party's political base and supported the centralized and peaceful negotiation of wages and working conditions by national union and employers' organizations. This alignment produced significant benefits for both big labor and big capital. 
   This arrangement had important structural flaws, however, that eventually destabilized it. One was a tax system that subsidized larger firms that were expanding and investing at the expense of small-scale and family firms. This led to increasing concentration and monopolization of ownership of the Swedish economy.  Although wage policies stressed equality within the working class, the gap between the working class and those who controlled capital grew substantially. At the time, this gap was considered the price of maintaining the industrialists' commitment to the coalition. In the end, it brought about the coalition's destruction. 
  When the first shock of rising oil prices hit in 1973-74, the resulting economic slowdown brought a fiscal crisis and triggered popular resistance to higher taxes. During this same period, Sweden was opening its economic borders and becoming a more active player in the international economy. This loosened the bonds that tied capital to local labor and weakened national labor movements. 
   In the early stages of globalization, the outward expansion of Swedish firms generated new employment at home, and the objectives of the two sides of the alliance did not significantly conflict. But once Sweden's transnationals began to define their own interests as global rather than national, the alliance between blue-collar workers and the owners of capital began to disintegrate. By this time, Sweden's highly educated white-collar workers outnumbered blue-collar workers, and the younger generation was taking the welfare state for granted, further weakening the political base of Sweden's Social Democrats. 
   The growing contradiction between government support for the global expansion of Swedish transnationals and the need to create employment and rising real wages at home could no longer be sustained. In 1976, the Social Democrats lost the election to a three-party, center-right coalition government.
   When the Social Democrats returned to power in 1982, they were a chastened party intent on promoting policies that would allow Sweden's industrialists sufficient profit margins on domestic investment to keep them "believing in Sweden," a phrase coined by P.G. Gyllenhammar, the chairman of Volvo. Maintaining a belief in Sweden meant increasing the share of the national product going to profits compared with wages so that Sweden's industrialists would find it worthwhile to invest at home. This was accepted as the price of maintaining full employment at a time when unemployment elsewhere in Europe was running at 8 to 9 percent or higher. 
   The resulting policies pushed corporate profits to previously unimaginable levels. With so much more money in their pockets than could be absorbed by productive investments, Swedish investors turned to speculation, driving up the price of real estate, art, stamps, and other speculative goods. To stop the upward spiral, the government loosened monetary controls so that the excess funds could spill over into Europe. Money flowed out at such a rate that it helped push real estate prices in London and Brussels to record highs. As the speculative bubble fed on itself, the quick profits offered by speculation drained funds away from productive investments within Sweden. When the bubble in Swedish real estate finally burst, the Swedish banking system lost $18 billion in uncollectible loans. The bill was picked up by the state and passed on to the Swedish taxpayers. { Does this economic bullshit sound familiar ?} 

EMMA AND THE OTHER PHILISTINES ----Episode 11

                        THE COUNTY FAIR SCENE

   At the county fair the parallel interruption or counterpoint method is utilized once more. Rodolphe finds three stools, puts them together to form a bench, and he and Emma sit down on the balcony of the town hall to watch the show on the platform, listen to the speakers, and indulge in a flirtatious conversation. Technically, they are not lovers yet. In the first movement of the counterpoint, the councilor speaks, horribly mixing his metaphors and, through sheer verbal automatism, contradicting himself : "Gentlemen ! May I be permitted, I say, to pay a tribute to the higher administration, to the government, to the monarch, gentlemen, our sovereign, to that beloved king, to whom no branch of public or private prosperity is a matter of indifference, and who directs with a hand at once so firm and wise that the chariot of state amid the incessant perils of a stormy sea, knowing, moreover, how to make peace respected as well as war, industry, commerce, agriculture, and the fine arts." 
   In the first stage the conversation of Rodolphe and Emma alternates with chunks of official oratory. "I ought," said Rodolphe, "to get back a little further."
   "Why ?" said Emma.
   But at this moment the voice of the councilor rose to an extraordinary pitch. He declaimed -----
   "This is no longer the time, gentlemen, when civil discord shed blood in our public places, when the landed gentry, the business-man, the working-man himself, peacefully going to sleep at night, trembled lest he should be awakened suddenly by the disasters of fire and warning church bells, when the most subversive doctrines audaciously undermined foundations." 
   "Well, some one down there might see me," Rodolphe resumed, "then I should have to invent excuses for a fortnight; and with my bad reputation----"
   "Oh, you are slandering yourself," said Emma. 
   "No! It is dreadful, I assure you."
   "But, gentlemen,"continued the councilor, "if, banishing from my memory the remembrance of these sad pictures, I carry my eyes back to the actual situation of our dear country, what do I see there ?"

   Flaubert collects all the cliches of journalistic and political speech ; but it is very important to note that, if the official speeches are stale "journalese," the romantic conversation between Rodolphe and Emma is stale "romanese." The whole beauty of the thing is that it is not good and evil interrupting each other, but one kind of evil intermingled with another kind of evil. As Flaubert remarked, he paints color on color.
   The second movement starts when Councilor Lieuvain sits down and Monsieur Derozerays speaks. According to Flaubert : "His was not perhaps so florid as that of the councilor, but it recommended itself by a more direct style, that is to say, by more special knowledge and more elevated considerations. Thus the praise of the Government took up less space in it ; religion and agriculture more. He showed in it the relations of these two, and how they had always contributed to civilization. Rodolphe with Madame Bovary was talking dreams, presentiments, magnetism." In contrast to the preceding movement, at the start the conversation between the two and the speech from the platform are rendered descriptively until in the third movement the direct quotation resumes and the snatches of prize-giving exclamations borne on the wind from the platform alternate rapidly without comment or description : "From  magnetism little by little Rodolphe had come to affinities, and while the president was citing Cincinnatus and his plow, Diocletian planting his cabbages, and the Emperors of China inaugurating the year by the sowing of seed, the young man was explaining to the young woman that these irresistible attractions find their cause in some previous state of existence.
   "Thus we," he said, "why did we come to know one another ? What chance willed it ? It was because across the infinite, like two streams that flow but to unite, our special bents of mind had driven us towards each other." 
    And he seized her hand ; she did not withdraw it.
   "For good farming generally !" cried the president. 
   "Just now, for example, when I went to your house ----."
   "To Monsieur Bizet of Quincampoix."
   "---did I know I should accompany you ?"
   "Seventy francs." 
   "A hundred times I wished to go; and I followed you---I remained."
   "Manures!"
   "And I shall remain to-night, to-morrow, all other days, all of my life! "
   "To Monsieur Caron of Argueil, a gold medal!" 
   "For I have never in the society of any other person found so complete a charm."
   "To Monsieur Bain of Givry-Saint-Martin."
   "And I shall carry away with me the remembrance of you."
   "Fora merino ram !"
   "But you will forget me; I shall pass away like a shadow."
   "To Monsieur Belot of Notre-Dame." 
   "Oh, do say no ! I shall be something in your thought, in your life, shall I not ? "
   "Porcine race ; prizes ---equal, to Messrs. Leherisse and Cullembourg, sixty francs !" 
   Rodolphe was pressing her hand, and he felt it all warm and quivering like a captive dove that wants to continue its flight; but, whether she was trying to take it away or whether she was answering his pressure, she made a movement with her fingers. He exclaimed ---
   "Oh, I thank you ! You do not repulse me ! You are good ! You understand that I am yours ! Let me look at you; let me contemplate you !"
   A gust of wind that blew in at the window ruffled the cloth on the table, and in the square below all the great caps of the peasant women were uplifted by it like the wings of white butterflies fluttering.
   "Use of oil-cakes," continued the president. He was hurrying on :"Flemish manure---flax growing---drainage---long leases---domestic service." 

                      {Will begin the fourth movement next episode.} 
   
  
   

  

CORPORATIONS ARE NOT HUMANS : NOT EVEN CLOSE---Episode 15

                  MAINTAINING COMPETITIVE MARKETS 

    Although big business often whines that government interferes unduly with its affairs, most calls for freeing the market ignores a basic reality : the efficient function of market economy depends on a strong government. This need is well established in contemporary market economic theory and has been demonstrated in practice. In their exhaustive critique of corporate libertarianism For the Common Good, Herman E. Daly and John Cobb, Jr. list the conditions on which the market depends for its efficient function yet cannot provide for itself.

* Fair competition { Already discussed in last episode. } 

* Moral capital : Although market theory assumes self-interested individuals and real-world markets often reward greedy, dishonest, and immoral behavior, the day-to-day interactions of an efficient market depend on trust. A market in which participants are driven purely by greed and desire to obtain momentary competitive advantage by any means --- a market without trust, cooperation, compassion, and individual integrity --- is not just an unpleasant place to do business. It is also highly inefficient, incurring inordinate costs for lawyers, security guards, and other defensive measures. Neither a society nor a market economy can function efficiently without a moral foundation. 

* Public Goods : Many investments and services that are essential to the public good --- such as investments in basic scientific research, public security and justice, public education, roads, and national defense --- are not supplied by the market because once they have been produced, they are freely available for anyone to use. Even most corporate libertarians recognize a role for government in providing such public goods, at least those essential for the profitable function of private business. The actual work may be done by private contractors, but the bills must be paid by 
governments out of tax revenues. 

* Full-Cost Pricing : The market produces an optimal allocation of resources only when sellers and buyers bear the full cost of the products they produce, purchase, and consume. Rarely, if ever, will full costs be internalized in an unregulated market, because competitive pressures make it necessary to externalize costs whenever possible. A producer that successfully externalizes social and environmental costs will gain a higher profit and attract more investors and thus can offer a lower price and capture a greater market share. It is wonderful when a company discovers inherent economic advantages in reducing its waste and paying its workers a fair wage, but experience shows that there is nothing inherent in the workings of the market to ensure that social and environmental costs will be internalized without active governmental intervention. 

* Just Distribution : In a market system there is a strong tendency, especially during periods of economic expansion, for the owners of capital to increase their wealth and incomes while the incomes of those who sell their labor lag or decline. A market in which economic power is unjustly distributed will allocate resources to producing luxuries for those with money while depriving those with no money of even the most basic necessities of life, which is neither just nor socially efficient. Market efficiency and institutional legitimacy depend on governmental intervention to constantly restore the equity that market forces inexorably erode. 

* Ecological Sustainability : As the human economy grows to fill its ecological space, limiting the scale of the economic subsystem to maintain an optimal balance with nature becomes necessary for species survival. Carbon dioxide emissions must be maintained below absorption levels. Fisheries harvests must be held to sustainable levels. Unfortunately, the unregulated market is blind to countless such constraints. Government must set limits and ensure ensure that appropriate signals are sent to the market. Even proposed "market solutions" to environmental problems, such as tradable pollution permits, depend on government intervention to set the limits, issue permits, and monitor compliance. 

The market produces socially optimal outcomes only when government and civil society are empowered to act to maintain the above conditions of market efficiency. A market freed from governmental restraint is inherently unsustainable because it erodes its own institutional, social, and environmental foundations.