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.