Tag Archive: corporations

Creative Capitalism and Human Welfare

In the August 11th edition of Time Magazine, Bill Gates wrote an article on the concept of ‘creative capitalism,’ or finding ‘imaginative’ ways to use the capitalist system to ‘do good’.  He argues that “capitalism has improved the lives of billions of people” (40) and that, in terms of meeting human needs, “governments and nonprofit groups have an irreplacable role in helping them [e.g. those whose needs aren’t met by the market], but it will take to long if they try to do it alone.  It is mainly corporations that have the skills to make technological innovations work for the poor” (40).  Essentially, ‘creative capitalism’ involves a corporation finding a profitable way to distribute goods and services according to need, or, in Gates’ words, “the companies make a difference while adding to their bottom line” (42).  How are corporations going to accomplish this within the mandates of the system?  According to Gates:  “it’s not just about doing more corporate philanthropy or asking companies to be more virtuous.  It’s about giving them a real incentive to apply their expertise in new ways, making it possible to earn a return while serving thh people who have been left out.  This can happen in two ways:  companies can find these opportunities on their own, or governments and nonprofits can help create such opportunities where they presently don’t exist” (43).

Gates’ heart is in the right place, I’m sure.  But let us refocus.  The market distributes goods according to “effective demand,” i.e. according to those who can pay.  The ability to pay is obviously contingent upon your income, coming from either property income (interest, etc, which comes from the ownership of capital goods) or labor income (wages, salaries, etc., that come from the selling of labor power).  Some own capital, and others don’t, and are forced to choose between the sale of their labor power, or death by starvation.  This set of conditions is legally solidified through the codification of private property rights (considered here as legal rights, not necessarily moral rights), and the enforcement of said rights through the coercive apparatus of the state.
Consequently, if you are not lucky enough to be a capitalist, you have two choices.  First, you can choose one from among many corporate taskmasters to work for under the condition that you won’t receive all the value you produce, and once in their firm, they have all the power over you and your life activity and the laws of the U.S. Constitution no longer apply. Alternately, you can choose to starve and die.   You have the freedom to choose between wage-slavery and death. That is the precise definition of ‘economic freedom’ for those who aren’t capitalists.  Even ‘creative capitalism’ would run on this formula.  The theory is that either (1) corporations should find ways to profit off ‘socially beneficial’ behavior themselves, or (2) NGO’s and governments should make ‘socially beneficial’ behavior profitable.  It reveals the true natures of the firm and the economic system when you consider that the argument is not that a firm is a social institution that impacts daily the lives of potentially billions of people, and thus should choose to make that impact a positive one on human welfare regardless of profit.  Instead, the argument for which Bill Gates is getting many pats-on-the-back for is that firms should find a way to profit from activity that doesn’t necessarily kill people, destroy the environment, and subvert democracy.  It is still distributing wages and goods based on neither contribution nor need, and is consequently still illegitimate.  I think it is highly more logical to argue that, as corporations are enabled to accumulate capital through social conditions, and they impact human welfare, they ought to ensure a positive impact on their actions and inactions whether or not it is profitable.  It might be replied, then, that a profit-independent ‘firm’ would be pushed out of the market, for that is not a very ‘capitalist’ trait. . . but that only goes to show how conflicted are the values of capitalism with the value of human welfare.  ‘Creative capitalism’ is little more than the advocacy of getting paid to throw scraps from the table at a banquet to the starving masses below.

Imagine a world where the means of production are owned by society. Profits are collected and go towards Public benefit, and decisions are made by those who will be affected. Would that world not be superior than our own? The system of private ownership allows individuals to profit off the labor of others, externalize social costs, and manipulate and erode popular control over the political, social, and economic spheres. What does the current system do that it has advocates?

The primary law of the system is profit. Jerry Mander examines 11 laws of corporate behavior, generalizable to individuals in the capitalist system by way of inference, and to the system as a whole by necessity (“The Rules of Corporate Behavior”, The Case Against the Global Economy (1996), edited by Jerry Mander and Edward Goldsmith, pp. 309-22). They are:

(1) “the profit imperative” (315), where individuals and corporations, by the laws of the capitalist system,
must take in more income than they expend. Mander says “the profit imperative and te hgrowth imperative are the most fundamental corporate drives; together they represent the corporation’s instinct to live” (315).

(2) “the growth imperative” (316), where growth of the company, and its profits (and its corollaries among individuals and political bodies) it transformed into an imperative. If profits are a necessary requirement for maintaining class status generally, and profits are consequently valued, then of course the push for ever greater profits increases in importance, at the expense of one’s competitors, competition in the market, and society at large.

(3)”competition and aggression,” where the individual and corporate pushes towards profits and growth lead to a dog-eat-dog, zero sum game. You must secure your position, for no one is looking out for you . . . you are consequently expected to cooperate and seek the benefit of the Team, but are constantly looking for an aggressive edge over your competition in the job market–above other corporations, capitalists, employees, etc.

(4) “amorality,” where “corporations do not have morals or altruistic goals . . . so decisions that may be antithetical to community goals or environmental health are made without misgivings” (317).

(5) “hierarchy,” where “corporate law requires that corporations be structured into classes of superiors and subordinates within a centralized pyramidical structure” (317).

(6) “quantification, linearity, and segmentation,” where “corporations require that subjective information be translated into objective form, that is, into numbers . . .[which] excludes from the decision-making process all values that cannot be quantified in such a way” (318).

(7) “dehumanization,” where “corporations make a conscious effort to depersonalize” (318), creating elaborate structures of rules for behavior on the job, and managerial discipline.

(8) “exploitation,” where “profit equals the difference between th amount paid to an employee and the economic value of the employee’s output . . . [and thus] is based on paying less than actual value for workers and resources” (319).

(9) “ephemerality [the quality of being transitory] and mobility,” where “corporations . . . have no commitment to locality, employees, or neighbors . . . [and so in] having no morality, no commitment to place, and no physical nature . . . a corporation ca nrelocate all of its operations to another place at the first sign of inconvenience” (319).

(10) “opposition to nature” where “corporations themselves and corporate societies are intrinsically committed to intervening in, altering, and transforming the natural world . . . [where] all manufacturing activity depends upon intervention in and reorganization of nature” (320).  This fact, combined with the imperative to grow, results in an ever-increasing consumption of natural resources, many of which either reproduce less quickly than they are extracted, or do not reproduce.  In other words, “the net effect is the corporate ravaging of nature” (320).  This results in a variety of phenomenon, from pollution to corporate contributions to global warming.

Finally, (11) “homogenization,” where “all corporations share an identical economic, cultural, and social vision and seek to acceperate the social and individual acceptance of that vision . . . [and so] life-styles and economic systems that emphasize sharing commodities and labor, that do not encourage commodity accumulation, or that celebrate nonmaterial values, are not good for business” (320-21).

Why is this relevant?  Corporations and corporate interests are the driving forced behind the global economic and political structures today.  They are the distributors of wages and goods, they control the media and the government, and they operate by these laws.  In this first examination of the laws of the corporation, we can already ask–do we want anything that operates by these laws determining the future of our world?

On Burma, aid, and capitalism

There is international outrage over Myanmar’s military junta’s prevention of international aid in the wake of Cyclone Nargis.  The aftermath of this cyclone, provided by the junta’s prevention of foreign aid and not themselves helping, has left 134,000 dead and missing and up to 2.5 million destitute (current Reuters count).  This has resulted as a result of neglect, of the junta’s prevention of aid and the allowance of the death of their people.  Consequently, a wave of international outrage grows.  For example, “the French ambassador, Jean-Maurice Ripert, said that the junta’s intransigence could lead to a “true crime against humanity.” (http://www.iht.com/articles/2008/05/18/asia/myanmar.php“.

So not-helping them and allowing them to starve to death is a crime against humanity?  Well, now, as a socialist I agree.  But what right do capitalists have to make such a claim?  Don’t they support a system whose distribution laws allow thousands to die each year in preventable ways, tens of thousands from starvation alone.  For example: “The number 35,615 is a conservatively low number for the barbarically needless daily deaths the poorest of the poor die. If we were to add the next two leading ways the poorest of the poor die, water borne diseases and AIDS, we would be approaching a daily body count of 50,000 deaths. Yes, upwards of 50,000 people per day are needlessly dying on Earth.”  (http://www.starvation.net/), in a system where the wealth of the rich in coercively protected.  If our corporations and capitalists can let the poor starve with impunity, what right do they have to complain?

Wal-Mart, Hillary Clinton, and Unions

Hillary Clinton and Wal-Mart

Why do labor groups support Hillary?  Supposedly, “Clinton has been endorsed for president by more than a dozen unions, according to her campaign Web site, which omits any reference to her role at Wal-Mart in its detailed biography of her” (http://abcnews.go.com/Blotter/story?id=4218509). 

Hillary’s chief strategist, Mark Penn, who is the “Worldwide President and CEO for Burson-Marsteller, an international PR conglomerate known for . . . busting unions”


She had a seat on Wal-Mart’s board of directors for, I think, six years prior to 1992 (and what notable political event happened to her family in 1992 that would have made a Wal-Mart connection inconvenient?), after which the seat conveniently ceased to exist.  In other words, it was not a fillable seat, it was one that existed for her

But how anti-union is Wal-Mart?  Let’s let them tell you . . .

Wal-Mart Training

But are its claims accurate?  Do Wal-Mart employees need a *horror movie music* UNION?!?!?

Check out http://wakeupwalmart.com/facts/.

“Wal-Mart Anti-Union Policy

Wal-Mart closes down stores and departments that unionize

  • Wal-Mart closed its store in Jonquierre, Quebec in April 2005 after its employees received union certification. The store became the first unionized Wal-Mart in North America when 51 percent of the employees at the store signed union cards. [Washington Post, 4/14/05]
  • In December 2005, the Quebec Labour Board ordered Wal-Mart to compensate former employees of its store in Jonquiere Quebec. The Board ruled that Wal-Mart had improperly closed the store in April 2005 in reprisal against unionized workers. [Personnel Today, 12/19/05]
  • In 2000, when a small meatcutting department successfully organized a union at a Wal-Mart store in Texas, Wal-Mart responded a week later by announcing the phase-out of its in-store meatcutting company-wide. [Pan Demetrakakes, “Is Wal-Mart Wrapped in Union Phobia?” Food & Packaging 76 (August 1, 2003).]

Wal-Mart has issued “A Manager’s Toolbox to Remaining Union Free,”

  • This toolbox provides managers with lists of warning signs that workers might be organizing, including “frequent meetings at associates’ homes” and “associates who are never seen together start talking or associating with each other.” The “Toolbox” gives managers a hotline to call so that company specialists can respond rapidly and head off any attempt by employees to organize. [Wal-Mart, A Manager’s Toolbox to Remaining Union Free at 20-21]

Wal-Mart is committed to an anti-union policy

  • In the last few years, well over 100 unfair labor practice charges have been filed against Wal-Mart throughout the country, with 43 charges filed in 2002 alone.
  • Since 1995, the U.S. government has been forced to issue at least 60 complaints against Wal-Mart at the National Labor Relations Board. [International Confederation of Free Trade Unions (ICFTU), Internationally Recognised Core Labour Standards in the United States: Report for the WTO General Council Review of the Trade Policies of the United States (Geneva, January 14-16, 2004)]
  • Wal-Mart’s labor law violations range from illegally firing workers who attempt to organize a union to unlawful surveillance, threats, and intimidation of employees who dare to speak out. [“Everyday Low Wages: The Hidden Price We All Pay for Wal-Mart,” A Report by the Democratic Staff of the Committee on Education and the Workforce, 2/16/04] ” (From wakeupwalmart, above)

Or if you think that site biased, look at the Human Rights Watch.  Yup, that’s right.  Human Rights Watch.


 How does this affect Hillary?

 Hillary was not adverse to using her Wal-Mart experience to champion causes she believed in.

“Fellow board members and company executives, who have not spoken publicly about her role at Wal-Mart, say Mrs. Clinton used her position to champion personal causes, like the need for more women in management and a comprehensive environmental program, despite being Wal-Mart’s only female director, the youngest and arguably the least experienced in business. On other topics, like Wal-Mart’s vehement anti-unionism, for example, she was largely silent, they said.” (MICHAEL BARBARO, “Clinton Moved Wal-Mart Board, But Only So Far,” New York Times, May 20, 2007, italics mine).

Is she still connected?

“Despite her criticism, Mrs. Clinton maintains close ties to Wal-Mart executives through the Democratic Party and the tightly knit Arkansas business community. Her husband, former President Bill Clinton, speaks frequently to Wal-Mart’s current chief executive, H. Lee Scott Jr., about issues like health care and even played host to Mr. Scott at the Clintons’ home in New York last July for a private dinner.


And several months ago, Mrs. Clinton helped broker a secret meeting between a top Wal-Mart executive and former Democratic operative, Leslie Dach, and leaders of the retailer’s longtime adversary at the United Food and Commercial Workers union, according to several people briefed on the matter, who spoke on condition of anonymity because they were not authorized to do so publicly.

The goal of the meeting was to tamp down the rancor between the company and the union, which has set up a group, WakeUpWalMart.com, that has harshly criticized the chain and leaked embarrassing internal documents to the news media, though an accord has not yet been reached”  (Barbaro). 

Quite frankly, Hillary’s appeals to labor and claims to want to increase the American “middle class” are hollow, empty appeals towards an audience, the American labor force (not to mention Wal-Mart’s notorious international sweatshop labor force, local communities affected by Wal-Mart’s practices, etc), that Hillary seems perpetually intent on betraying.  A vote for Hillary is a vote against the poor and the working class.

Capitalism tends to go through crises in general–its laws of distribution result in some sort of overconcentration in investment (the organic composition of capital is the technical term), or production beyond consumption, or a lack of investment and the like. Regardless of the specific cause of the business cycle, the effects are similar; capitalists make some mistake in investment by investing in what they can’t sell, or they sit on their own capital instead of circulating it. The problem is that in a capitalist economy whose primary laws are “Profit!” and “Grow!,” staying stationary will simply cause the system to surpass you and push you out of the economy. Grow or die. Consequently, an inability to invest or grow such as in business crises will result in capitalists pushing on labor to increase profitability–firing, working longer, harder, etc. In every case where there is a systematic crash, labor suffers first even when it is capital’s fault.

Lets get to my point. In a systematic transition from capitalism to socialism, capitalist profitability will decrease or get squeezed out–consumerism will stop fueling them, the state will push industry to sell, or the like. But since it is the transition to socialism, it is still under capitalist laws, and capitalists will try to consolidate power however they can. If a particular nation tries to socialize, capital flight will likely occur, or an increase in corporations trying to bolster political influence while increasing profitability (because, as always, the will be the last to take a hit economically), or appealing to the WTO which will undoubtably attempt trade sanctions. All these actions will significantly hurt the population of a nation (or the international community–but it’s hard to see how it would get worse in places like India, say, or sub-Saharan Africa), and it would be left to charities or the government(s) to compensate, but dependence on charities are iffy at best, and governments would have to develop the infrastructure (remember: this is the transition to socialism, it has not yet occured, but is in process). Consequently, in the birth pangs of socialism, labor and the needy would be sacrificed unless there are places set up outside the capitalist system to house, feed, educate, and take care of them. Socialists need to concentrate on building places that are safe havens from capitalism–think Noah’s Ark on land. This is completely necessary–because before the international community attains socialism, corporations and capitalists will squeeze every last bit of profitability out of workers, and funnel it into every political means before they have no choice, and consequently within the current system the lower classes will be the first to suffer, and suffer much without a safe haven.