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. 

CORPORATIONS ARE NOT HUMANS : NOT EVEN CLOSE ---Episode 14

 THE WHOLE POINT OF PRIVATIZATION IS TO TRANSFER 
 WEALTH FROM THE PUBLIC PURSE --- WHICH COULD 
 REDISTRIBUTE IT TO EVEN OUT SOCIAL INEQUALITIES
 ----- TO PRIVATE HANDS TO INCREASE THE BOTTOM
 LINE OF THOSE WHO ARE ALREADY RICH 


   The proponents of corporate libertarianism damned near shit in their knickers when the Soviet empire finally keeled over and died in 1989. They viewed the demise as an opportunity to press forward with their cause. They whooped and hollered over the thought that the world was finally becoming a global consumer society. 
   The governments and corporations of the West quickly reached out to urge Eastern Europe  and the countries of the former Soviet Union to embrace the lessons of Western success by opening their 
borders and greening their economies. Armies of Western experts were fielded to help these and other "transition states" write laws that would prepare the way for Western corporations to penetrate their economies. 
 Simultaneously, the industrial West intensified its effort to create a unified global economy through the General Agreement on Tariffs and Trade (GATT), establish a powerful World Trade Organization (WTO), and create regional markets through such initiatives as the North American Free Trade Agreement (NAFTA), Maastricht (the European common market), and the Asia-Pacific Economic Community (APEC). Anxious to please powerful corporate interests, feeling Robert Rubin's tongue in his ear, and otherwise clueless about what else to do, President Bill Clinton embraced economic globalization as both his jobs program and his foreign policy.
   Marxist socialism died an ignoble death. However, it is no more accurate to attribute the West's economic and political triumph to the unfettered marketplace than it is to blame the U.S.S.R.'s failure on an activist state. Contrary to the boastful claims of corporate libertarians, the West did not prosper in the post-World War II period by rejecting the state in favor of the market. Rather, it prospered by rejecting extremist ideologies of both Right and Left in favor of DEMOCRATIC PLURALISM : a system of governance based on a pragmatic, institutional balance among the forces of government, market, and civil society. 
   Driven by the imperatives of depression and war, America emerged from Word War II with government, market, and civil society working together in a healthier, more dynamic, and more creative balance than at any time since the pre-Civil War years. A relatively egalitarian income distribution created an enormous mass market, which in turn drove aggressive industrial expansion. America certainly was far from socialist, but neither was it 100 percent laissez-faire capitalist. We might more accurately call it pluralist. This is the America that readily withstood the challenges posed by the Soviet empire to emerge as the Cold War victor. The America of democratic pluralism and equality defeated communism, not "free" market America. 
   Although the specifics differed, similar patterns of democratic pluralism prevailed in most of the Western industrial democracies. Some moved more toward public ownership and management of nationalized industries than others but within a pluralistic framework in which both market and government were strong players. 
   In contrast, the Soviet system embraced an ideological extremism so strongly statist that the market and the private ownership of property were virtually eliminated. The same ideology resulted in eliminating the civic sector's essential public oversight role. This left only a hegemonic and unaccountable state. Lacking the pluralistic balance and civic accountability afforded by the civic and market sectors, the Soviet economy was both unresponsive to popular needs and inefficient in the use of resources. The consequent suffering of the Soviet people was not a consequence of an activist state. It was the consequence of an extremist ideology that excluded everything except the state. 
   The West is now on a similar extremist ideological path ; the difference is that we are captive to detached and unaccountable corporations rather than to a detached unaccountable state. It is ironic that the closer the corporate libertarians move us toward their ideological ideal of laissez-faire capitalism, the less responsive the economy becomes to the real needs of people and planet. Ironically, the reasons for the failure are virtually identical to the reasons the Marxist economies failed : 

*   Both lead to the concentration of economic power in unaccountable centralized institutions --- the state in the case of Marxism, and the transnational corporations in the case of capitalism.

*   Both create economic systems that destroy the living systems of the earth in the name of economic progress. 

*   Both produce a disempowering dependence on mega-institutions that erodes the social capital on which the efficient function of markets, governments, and society depends. 

*   Both take a narrow economistic view o human needs that undermines the sense of spiritual connection to the earth and to the community of life essential to maintaining the moral fabric of society. 

   An economic system can remain viable only as long as society has mechanisms to counter the concentration and abuse of both state and market power and the erosion of the natural, social, and moral capital that such abuses commonly exacerbate. Democratic pluralism isn't a perfect answer to the governance problem, but it seems to be the best we have discovered in our imperfect world. 


   

EMMA AND THE OTHER PHILISTINES --- Episode 10

             More About Flaubert's Use Of Structural Transition 
             {Continuing With Scene Where Leon Leaves For Paris} 


     Emma's apparent virtue frightens off Leon so that when he leaves for Paris the way is clear for a more forward lover. The transition is going to be from Emma's illness following Leon's departure to her meeting with Rodolphe and then the scene of the county fair. The meeting is a first-class illustration of structural transition which took Flaubert many days to compose. His intention is to introduce Rodolphe Boulanger, a local country gentleman, at heart exactly the same kind of cheap vulgarian as his predecessor, but with a dashing, brutal charm about him. The transition goes as follows : Charles hd invited his mother to come to Yonville in order to decide what to do about Emma's condition, for she is pining away. The mother comes, decides that Emma reads too many books, evil novels, and undertakes to discontinue Emma's subscription at the lending library when she passes through Rouen on her way home. The mother leaves on a Wednesday, which is the market day at Yonville. Leaning out of the window to watch the Wednesday crowds, Emma sees a gentleman in a green velvet coat(green is what Charles picks for her pall) coming to Bovary's house with a farm boy who wants to be bled. In the study downstairs when the patient faints Charles shouts for Emma to come down. (It should be noted that Charles is consistently instrumental, in a really fateful way, in introducing Emma to her lovers or helping her in continuing to see them.) It is Rodolphe who watches (with the reader) the following lovely scene : "Madame Bovary began taking off his tie. The strings of his shirt had got into a knot, and for a few minutes her light fingers kept running about the young fellow's neck. Then she poured some vinegar on her cambric handkerchief ; she moistened his temples with little dabs, and then blew upon them softly. The yokel revived . . . 
   Madame Bovary took the basin to put it under the table. With the movement she made in sinking to a squatting position, her dress (it was a summer dress with four flounces, yellow, long in the waist and wide in the skirt) ballooned out around her on the stone floor of the room ; and as Emma, stooping, swayed  little on her haunches as she stretched out her arms, the ballooning stuff f her skirt dimpled with the inflections of her body." 

                           THE COUNTY FAIR EPISODE 

   The county fair episode is instrumental in bringing Rodolphe and Emma together. On July 15, 1853, Flaubert wrote :"Tonight I have made a preliminary sketch of my great scene of the county fair. It will be huge --- about thirty manuscript pages. This is what I want to do. While describing that rural show (where all the secondary characters of the book appear, speak, and act) I shall pursue . . . between its details and on the front of the stage a continuous dialogue between a lady and a gentleman who is turning his charm on her. Moreover, I have in the middle of the solemn speech of a councilor and at the end something I have quite finished writing, namely a newspaper article by Homais, who gives an account of the festivities in his best philosophic, poetic, and progressive style." The thirty pages of the episode took three months to write. In another letter, of September 7, 1853, Flaubert noted :"How difficult it is . . . A tough chapter. I have therein all the characters of my book intermingled in action and in dialogue, and . . . a big landscape that envelops them.  If I succeed it will be most symphonic." On October 12, 1853  : "If ever the values of a symphony have been transferred to literature, it will be in this chapter of my book. It must be a vibrating totality of sounds. One should hear simultaneously the bellowing of the bulls, the murmur of love, and the phrases of the politicians . The sun shines on it, and there are gusts of wind that set big white bonnets astir. . . I obtain dramatic movement merely through dialogue interplay and character contrast." 
   As if this were a show in young love's honor, Flaubert brings all the characters together in the marketplace for a demonstration of style : this is what the chapter really is about. The couple, Rodolphe (symbol of bogus passion) and Emma (the victim), are linked up with Homais (the bogus guardian of the poison of which she will die), Lheureux (who stands for the financial ruin and shame that will rush her to the jar of arsenic), and there is Charles (connubial comfort). 
   In grouping the characters at the beginning of the county fair, Flaubert does something especially significant in regard to the moneylending draper Lheureux and Emma. Some time before, it will be recalled , Lheureuxwhen offering Emma his services---articles of wear and if need be, money ---was curiously concerned with the illness of Tellier, the proprietor of the cafe opposite the inn. Now the landlady of the inn tells Homais, not without satisfaction, that the cafe opposite is going to close. It is clear that Lheureux has discovered that the proprietor's health is getting steadily worse and that it is high time to get back from him the swollen sums he has loaned him, and as a result poor Tellier is now bankrupt. "What an appalling disaster!" exclaims Homais, who, says Flaubert ironically, finds expressions suitable to all circumstances. But there is something behind this irony. For just as Homais exclaims "What an appalling disaster!" in his fatuous, exaggerated, pompous way, at the same time the landlady points across the square, saying, "And there goes Lheureux, he is bowing to Madame Bovary, she's taking Monsieur Boulanger's arm." The beauty of this structural line is that Lheureux, who has ruined the cafe owner, is thematically linked here with Emma, who will perish because of Lheureux as much as because of her lovers ---and her death really will be an "appalling disaster" The ironic and the pathetic are beautifully intertwined in Flaubert's novel. 

CORPORATIONS ARE NOT HUMANS : NOT EVEN CLOSE---Episode 13

                              ECONOMIC DEMAGOGUERY---continued

   A belief in the possibility of unlimited growth is the very foundation of the ideological doctrine of corporate libertarianism, because to accept the reality of physical limits is to accept the need to limit greed and acquisition in favor of economic justice and sufficiency. This would require a fundamental reorientation of economic priorities to focus on equity rather than growth. 
   The propensity of neoclassical economists to choose their assumptions to fit their conclusions is revealed with particular clarity in the computer simulations they use to demonstrate the economic benefits of lowering trade barriers. During the public debates on the North American Free Trade Agreement ( NAFTA ) , the proponents of the agreement aggressively brandished the results of computer simulations, known as general equilibrium models, as proof that NAFTA would create large numbers of new jobs for each of the participating NAFTA countries : Canada, Mexico, and the United States. 
   Economist James Stanford examined the models used to generate these projections and found that each one incorporated assumptions from classical trade theory sharply at odds with economic reality. To illustrate the contradictions, he related the following hypothetical discussion between an auto worker in the midwestern United States and one of the pro-NAFTA economic modelers. The worker related to the modeler her fears that : 

    If NAFTA is approved, Ford will surely move its Taurus plant to Mexico where it can hire workers for a tenth of my pay with no independent union and export cars back to the United States. With the labor market already depressed in this part of  the country I don't see any prospect of finding a job at comparable pay.

   The economic modeler, looking surprised, assures her that he is an expert on the subject of trade and that her fears are entirely unfounded: 

     Don't worry. I've constructed a computer simulation that shows you will actually benefit from the trade agreement because of the new jobs NAFTA will create in America. Here's how it works. In my model I assume capital is immobile. Therefore, Ford cannot move its plant to Mexico. Nor would it want to, because I assume unit labor costs are the same in both countries and in my model Americans have a clear preference for U.S.-made products, even if they are more expensive.
   My model also assumes full employment and specifies that anything imported to the U.S. from Mexico must be balanced by American exports, so new export industries will necessarily spring up here to replace any industries that might be displaced by Mexican imports. Since you earn above-average wages at Ford, you obviously possess valuable skills. With full employment you will certainly find another job very shortly in one of these new export industries, probably with higher pay than your current job. So NAFTA will be great for you. 

   A worker confronted with such an explanation might conclude that the economic modeler had just arrived from an alien planet with little knowledge of affairs on Earth. Although the discussion is hypothetical, the assumptions articulated by the economist (in bold type identification) are not. Each of them is built into one or more of the economic models that trade experts used to prove that the United States would realize employment gains from NAFTA. In comparing the models and their results, Stanford found a direct relationship between unrealistic assumptions and favorable job projections---the less realistic the assumptions, the more optimistic the projections. The more realistic models predicted either negative or negligible economic consequences for at least one of the partners.
   Those who use these models to press their case make no mention of the underlying assumptions. The misrepresentations are so flagrant and persistent that one sometimes suspects an intent to misinform the public. For example, during the NAFTA debates, the unabashedly pro-free trade New York Times took the unusual step of presenting a trade economics primer on its front page. The primer provided a textbook explanation of the theory of comparative advantage to bolster its editorial position in support of the NAFTA legislation. No mention was made, however, of the underlying assumptions of the theory, let alone of how those assumptions diverge from reality. Letters submitted by readers to the editor of the New York Times pointing out the omission were not printed. 
   Those who engage in such distortion lend legitimacy to flawed economic policies that advantage the greediest among us to the disadvantage of the rest. 


      HOW THE CORPORATE LIBERTARIANS JUSTIFY THE
                                              INJUSTICE 

   The moral philosophers of market liberalism perpetuate similar distortions by neglecting the distinction between the rights of property and the rights of people. Indeed, they equate the freedom and rights of individuals with market freedom and property rights. The freedom of the market is the freedom of those with money. When rights are a function property rather than personhood, only those with property have rights.

   It is a basic premise of democracy that each individual has equal rights before the law and an equal voice in political affairs --- one person, one vote. We can rightfully look to the market as a democratic arbiter of rights and preferences only to the extent that money and property are equitably distributed.  Although a market can allocate efficiently with less than equality, when 358 billionaires enjoy a combined net worth of $760 billion---equal to the net worth of the poorest 2.5 billion of the world's people --- the market is neither just nor efficient and it loses all legitimacy as a democratic institution. 
   Publications such as Fortune, Business Week, Forbes, The Wall Street Journal, and The Economist---all ardent advocates of corporate libertarianism --- rarely if ever praise an economy for its progress toward eliminating poverty or achieving greater equity. Rather, they regularly evaluate the performance of economies by the number of millionaires and billionaires they produce, the competence of managers by the cool dispassion with which they fire thousands of employees, the success of individuals by how many millions of dollars they acquire in a year, and the success of companies by the global reach of their power and their ability to dominate global markets. 
   Take for example, the cover story of the July 5, 1993, issue of Forbes, trumpeting the extraordinary accomplishments of the free market under the banner "Meet the World's Newest Billionaires" :

     As disillusion with socialism and other forms of statist economics spreads, private, personal initiative is being released to seek its destiny. Wealth, naturally, follows. The two big openings for free enterprise in this decade have come in Latin America and the Far East. Not surprisingly, the biggest clusters of new billionaires on our list have risen from the ferment of these two regions. Eleven new Mexican billionaires in two years, seven more from ethnic Chinese. 

   Taking a slightly more populist view, Business Week presented a special report titled "A Millionaire a Minute" in its November 29, 1993, issue. It included this breathless account of hat the free market has accomplished in Asia : 

     Wealth. To most Asians just one generation ago, it meant moving to the U.S.----or selling natural resources to Japan. But now, East Asia is generating its own wealth on a speed and scale that probably is without historical precedent. The number of non-Japanese Asian multimillionaires is expected to double to 800,000 by 1996. . . East Asia will surpass Japan in purchasing power within a decade. And with the savings increasing $550 billion annually it is becoming the world's biggest source of liquid capital. "In Asia," says Olarn Chaipravat, chief executive of Siam Commercial Bank, "money is everywhere." . . . There are new markets for everything from Mercedes Benz cars to Motorola mobie phones to Fidelity mutual funds. . . To find the nearest precedent, you need to rewind U.S. history 100 years to the days before strong unions, securities watchdogs and antitrust laws. 

   Such stories do not simply glorify the pursuit of greed, they perversely elevate it to the level of a religious mission. Never mind that although a few Asians have made vast fortunes and a tiny minority of Asians have risen to the overconsumer class, the suffering of the 675 million Asians who live in absolute poverty continues unabated. In a special 1994 issue, "21st Century Capitalism," Business Week confirmed that market economics is a class issue and that corporate libertarians are clear as to whose class interests they are advancing : 

     The death throes of communism clearly gave birth to the new era, leaving most nations with only one choice ---to join. . . the market economy. . . Almost 150 years following the publication of the Communist Manifesto, and more than half a century after the rise of totalitarianism, the bourgeoise has won. 

   It seems the corporate libertarians are a god deal more concerned with making money for the rich than with meeting human needs. Even the oft-cited claim of neoclassical economics to "value-free objectivity" supports this bias as it rests on the questionable premise that a decision is objective and value free if it is based solely on financial return. Never mind that such calculations almost always work to the advantage of those who have money to which the returns are being calculated at the expense of those without money. 




   

EMMA AND THE OTHER PHILISTINES---Episode 9

                           Continuing With Structural Transition 

   In Yonville just before Leon leaves for Paris, a more complex structural transition takes place from Emma and her mood to Leon and his, and then to his departure. While making this transition Flaubert, as he does several times in the book, takes advantage of the structural meanderings of the transition to review a few of his characters, picking up and rapidly checking, as it were, some of their traits. We start with Emma  returning home after her frustrating interview with the priest(seeking to calm the fever that Leon has aroused), annoyed that all is calm in the house while within she is tumult. Irritably, she pushes away th advances of her young daughter Berthe, who falls and cuts her cheek. Charles hastens to Homais, the druggist, for some sticking plaster which he affixes to Berthe's cheek. He assures Emma that the cut is not serious but she chooses not to come down to dinner and, instead, remains with Berthe until the child falls asleep. After dinner Charles returns the sticking plaster and stays at the pharmacy where Homais and his wife discuss with him the dangers of childhood. Taking Leon aside, Charles asks him to price in Rouen the making of a daguerrotype of himself that in his pathetic smugness he proposes to give to Emma. Homais suspects that Leon is having some love affair in Rouen , and the innkeeper Madame Lefrancois questions the tax collector Binet about him. Leon's talk with Binet helps, perhaps, to crystallize his weariness at loving Emma with no result. His cowardice at changing his place is reviewed, and then he makes up his mind to go to Paris. Flaubert has attained what he wanted, and the flawless transition is established from Emma's mood to Leon's mood and his decision to leave Yonville. Later, we shall find another careful transition when Rodolphe Boulanger is introduced. 

      ________________________________________________


{ On January 15, 1853, as he was about to begin part two, Flaubert wrote to Louise Colet : "It has taken me five days to write one page . . . What troubles me in my book is the insufficiency of the so-called amusing element. There is little action. But I maintain that images are action. It is harder to sustain a book's interest by this means., but if one fails it is the fault of style. I have now lined up five chapters of my second part in which nothing happens. It is a continuous picture of small-town life and of an inactive romance, a romance that is especially difficult to paint because it is simultaneously timid and deep, but alas without any inner wild passion. Leon, my young lover, is of a temperate nature. Already in the first part of the book I had something of this kind : my husband loves his wife somewhat in the same way as my lover does. Both are mediocrities in the same environment, but still they have to be differentiated. If I succeed, it will be a marvelous bit, because it means painting color upon color and without well-defined tones." Everything, says, Flaubert, is a matter of style, or more exactly of the particular turn and aspect one gives to things. 


   Emma's vague promise of happiness coming from her feeling for Leon innocently leads to Lheureux (ironically a well-chosen name, "the happy one," for the diabolical engine of fate). Lheureux, the draper and moneylender, arrives with the trappings of happiness. In the same breath he tells Emma confidentially that he lends money ; asks after the health of a cafe keeper, Tellier, whom he presumes her husband is treating ; and says that he, too, will have to consult the doctor one day about a pain in his back. All these premonitions, artistically speaking. Flaubert will plan it in such a way that Lheureux will lend money to Emma, as he had lent money to Tellier, and will ruin her as he ruins Tellier before the old fellow dies ; moreover, he will take his own ailments to the famous doctor who in a hopeless attempt is called to treat Emma after she takes poison. This is the planning of a work of art.
   Desperate with her love for Leon, "Domestic mediocrity drove her to luxurious fancies, connubial tenderness to adulterous desires." Daydreaming of her school days in the convent, "she felt herself soft and quite deserted. like the down of a bird whirled by the tempest, and it was unconsciously that she went towards the church, inclined to no matter what devotions, so that her soul was absorbed and all existence lost in it." { About the scene with the cure' Flaubert wrote to Louise Colet in mid-April 1853 : "At last I am beginning to see a glimmer of light in that damned dialogue of the prism priest scene . . . I want to express the following situation : my little woman in a fit of religious emotion goes to the village church ; at its door she finds th parish priest. Although stupid, vulgar, this priest of mine is a good, even excellent fellow ; but his mind dwells entirely on physical things (the troubles of the poor, lack of food or firewood), and he does not perceive moral torments, vague mystic aspirations ; he is very chaste and practices all his duties. The episode is to have at most six or seven pages without a single reflection or explanation coming from the author (all in direct dialogue). " We shall note that this episode is composed after the counterpoint method : the cure' answering answering what he thinks Emma is saying, or rather answering imaginary stock questions in a routine conversation with a parishioner, and she is voicing a kind of complaining inner note that he does not heed ---and all the time the children are fooling in the church and distracting the good priest's attention from the little he has to say to her. 

CORPORATIONS ARE NOT HUMANS : NOT EVEN CLOSE ---Episode 12

    THE BETRAYAL OF ADAM SMITH AND DAVID RICARDO
                                             (A Continuation) 


    We now move on from Adam Smith to David Ricardo, and discuss how corporate libertarians confuse the truth with fiction. We've seen the way libertarians contradict the truth of what Adam Smith advocated. Now we look at David Ricardo's theory of comparative advantage, which corporate libertarians regularly invoke as proof of their argument that unrestrained free trade advances the public good. This theory, originally articulated by Ricardo in 1817, provides an elegant demonstration that, under certain conditions, trade between two countries works to the benefit of the people of both. Three conditions, among others, are fundamental to this outcome : (1) capital must not be allowed to cross national borders from a high-wage to a low-wage country, (2) trade between the participating countries must be balanced, and (3) and each country must have full employment. 
   When these conditions are met, investment in each country will tend to flow toward those activities in which each has a comparative advantage based on differences in their natural endowments. To use Ricardo's example, because of difference in climate it may be relatively more efficient to produce wine in Portugal and woolen goods in England. In the event of open trade between the two, the hapless vintner in England who finds himself unable to compete with imported Portugese wines will convert his grape fields to pasture lands for sheep and his winery to a woolens mill employing the same people. 
   In Ricardo's time, most trade involved the exchange of finished national goods, produced by national enterprises. Today, products are commonly assembled using components and services produced in many different countries. Global corporations, rather than national companies, are likely to be the coordinating units, with the result that roughly a third of the $3.3 trillion in goods and services traded internationally in 1990 consisted of transactions within a singe firm. A growing portion of international is intraindustry, meaning that countries are exchanging the same product --- as when the United States and Japan sell automobiles to each other --- making it difficult to argue that natural comparative advantage is involved and rendering trade theory irrelevant in assessing the consequent costs and benefits. 

   In the pursuit of free trade, corporate libertarians actively promote the removal of restrictions on the transfer of factories across borders and the free international movement of money, belittle trade balances as irrelevant, and look to unemployment as a beneficial brake on inflation --- in each instance disregarding essential conditions of the trade theory they invoke to support their cause. In truth, the "trade agreements"advocated by corporate libertarians are not about trade ; they are more about economic integration. Although the theory of comparative advantage applies to balanced trade between otherwise independent national economies, a very different theory --- the theory of downward leveling --- applies when national economies are integrated. 
   When capital is confined within the national borders of trading partners, it must flow to those industries in which its home country has a comparative advantage. When the economies are merged, capital flows to whatever locality offers the maximum opportunity to externalize costs through cash subsidies, tax breaks, substandard pay and working conditions, and lax environmental standards. Income is thus shifted from workers to investors, and costs are shifted from investors to the community. It seems a common practice for corporate libertarians to justify their actions based on theories that apply only in the world that by their actions they seek to dismantle. 
   Economist Neva Goodwin suggests that neoclassical economists have invited this distortion and misuse of economic theory by drawing narrow boundaries around their field that exclude most political and institutional reality. She characterizes the neoclassical school of economics as the political economy of Adam Smith minus the political and institutional analysis of Karl Marx: 

     The classical political economy of Adam Smith was a much broader, more humane subject than the economics that is taught in universities today. . . For at least a century it has been virtually taboo to talk about economic power in the capitalist context ; that was a Marxist idea. The concept of class was similarly banned from discussion. 

Adam Smith was as acutely aware of issues of power and class as he was of the dynamics of competitive markets. However, the neoclassical economists and the neo-Marxist economists bifurcated his holistic perspective on the political economy, one taking those portions of the analysis that favored the owners of property, and the other taking those that favored the sellers of labor. Thus, the neoclassical economists left out Smith's considerations of the destructive role of power and class, and the neo-Marxists left out the beneficial functions of the market. Both advanced extremist social experiments on a massive scale that embodied a partial vision of society, with disastrous consequences. 

       THE DEMAGOGUERY OF U.S. TRADE AGREEMENTS 

   On the evening of December 1, 1994, a lame-duck session of the U.S Senate approved by a margin of seventy-six to twenty-four the Uruguay round agreement of the General Agreement on Tariffs and Trade (GATT) that created the World Trade Organization. Responding to their corporate financial sponsors, a broad coalition of Republican and Democratic senators supported the measure in defiance of widespread and growing opposition among those Americans familiar with the agreement and its threat to jobs, the environment, and democracy. The strong and unequivocal backing of the agreement by President Bill Clinton and Vice President Al Gore (and their friends at Goldman Sachs, et al) deepened the chasm between them and their core labor and environmental constituencies. 
   C-SPAN, a cable television news channel, held a telephone call-in session following the vote. Doug Harbrecht, the trade editor of Business Week, was the guest resource person. As caller after caller phoned in to express outrage at the politicians who voted for the agreement in support of big-money interests and total disregard of the of the popular will, Harbrecht  commented that the pro-GATT position represented impeccable economics but bad politics. As did many of his colleagues, Harbrecht mistook free-market ideology for good economics.  The global economic integration advanced through GATT and the World Trade Organization is at odds with the most basic principles of market economics and puts in place an economic system designed to self-destruct at an enormous cost to human societies. The can scarcely be considered the practice of "impeccable" economics. 
   How can neoclassical economists advocate economic integration if it advances conditions that are at odds with those required for efficient market function ? An important part of the answer is found in their legendary ability TO ASSUME AWAY REALITY.  Anyone who has dealt with economists to any extent know that they have n unlimited ability to assume. When the real world diverges from the conditions necessary to support their preferred policy options, economic rationalists are prone to solve the conflict by assuming the conditions that support their recommendations. 
   Take the case of the obvious reality that the human economy is embedded in and dependent on the natural environment. As far back as 1798, Thomas Robert Malthus suggested that environmental limits might make population growth a problem for the future of humanity. Neoclassical economists have dealt with this inconvenience by adopting an analytical model that assumes economies consist of isolated, wholly self-contained, circular flows of exchange values (labor, capita,. and goods)between firms and households without reference to the environment. In other words, they avoid the problem of environmental limits by creating a model that assumes the environment doesn't exist. They then conclude from this model that the economy does not depend on the environment and dismiss those who challenge the possibility of infinite growth on a finite planet with the stinging epithet "Neo-Malthusianism ! "