Social Origins of the American Corporate Predator State

Jamie Galbraith’s recent book describes modern (Bush-Cheney) Republicanism as creating a “predator state”. Its predatory aspects are starkly visible in the gangs of corporate lobbyists who roam Washington DC, the Halliburton Iraq war procurement scandal, and the corruption and incompetence that surrounded the Hurricane Katrina relief effort.

However, the broad concept of a predator state needs qualification as we are really talking of an “American corporate” predator state. Thus, the predatory nature of contemporary US governance is quintessentially linked to corporations, and it is also a uniquely American phenomenon.

Kleptocratic predator states, like Mugabe’s Zimbabwe or Mobutu’s Zaire in Africa, are fundamentally different. There is no equivalent in Europe, and none in East Asia where ruling elites have a sense of obligation to the nation even as they often enrich themselves illicitly. Nor too is there an equivalent in Latin America because government there never reached an economic size proportional to that of government in the US.

It is important to understand the social origins of the American corporate predator state because understanding is a necessary part of developing responses for caging the predators and replacing them with another better order. Those origins clearly trace back to the military – industrial complex that President Eisenhower warned about in his final televised address to the nation on January 17, 1961.

That complex has captured politics and corrupted the business of government, including of course the conduct of national security policy. The fact that it has wrapped itself with the flag and entwined itself with the military makes it impossible to confront without being charged as unpatriotic. Worst yet, its enormous enduring profitability has provided a model for imitation by other industrial complexes like Big Pharma and Big Oil.

The political success of these predators is clearly linked to money’s role in politics. Money gives the power to buy the political process, and that power is defended by a gospel of free speech that takes no account of the fact that out-shouting someone is qualitatively equivalent to silencing them. Economics also comes to money’s defense with its absurd myth of a market for ideas in which participants compete on a level playing field and truth is effortlessly sorted from error.

The American worship of business and businessmen, which Sinclair Lewis (Babbitt, 1922) wrote about long ago, also plays a role. This worship privileges business over thought and other activities, and is behind the dismissive sneer “if you’re so smart how come you are not rich?” As a result, Americans are all too willing to hand over their government to business predators. Today, it is in Goldman Sachs we trust.

Another feature of business worship is a tendency to conflate profit with free markets. That means the distinction between fair competition (which is good) and fat profits (which are bad) is lost, thereby providing cover for predators.

Lastly, there is the legacy of the Cold war which contributed to economic dumbing-down and suppression of awareness of class and class conflict. This suppression was seen as necessary for blunting the dangerous appeal of Soviet communism, but a consequence was to create blindness to the predators in our midst.

All of this reveals a deep deficit in America’s social and economic understanding (some deficits really do matter). And as long as this deficit remains, the predators will have a starting gate advantage in the game of political persuasion.

Yet, how to close the deficit and insert another understanding is an enormous challenge. There are deep institutional obstructions in the academy, the media, and the Democratic Party. Moreover, raising these issues may create unsettling cognitive dissonance that pushes voters into denial and a closer embrace of the predators.

In effect, there is a paradox to be solved. Lasting progressive political victory requires transforming understanding, but the immediate political incentives are aligned to discourage engagement with such a project.

Copyright Thomas I. Palley

5 Responses to “Social Origins of the American Corporate Predator State”

  1. George N. Wells, CPIM Says:

    Tom, et al.,

    I think that there is an aspect of this problem that has not yet been fully explored — the United States is a Democratic Republic whereas businesses are, at best, Feudal.

    Feudal systems, even when they attempt to put on sham democratic exercises like shareholder votes, concentrate power and wealth to the few and reject any form of outside intervention, considering that as tantamount to an act of war.

    As you noted corporations can mobilize resources sufficient to influence legislators in the Congress and even members of the Executive branch of our government. These corporations like the Feudal system and encourage things such as the idea that The POTUS is a “Unitary Executive” with unlimited powers.

    Corporations, while declared de-facto persons by the Supreme Court are really little more than Feudal mini-states resident within the USA. They should be treated as such and monies flowing from corporations to elected officials as well as appointed members of government should be treated as though they took money from a foriegn government.

  2. Chuck Emmons Says:

    Dr. Palley,
    I find the same effects on social programming as you describe in the military-industrial relationship’s effects on politics.
    First-order social programming is usually initiated by concerned citizens or social activists. As a basic order of funding is developed and a societal response to the new area of concern evolves, economic criteria begin to creep into the new field in the form of “outcomes”, usually expressed in increasingly economic terms, even when effective solutions have not yet been found. Credentialling usually trumps dedication and empathy as the required inputs into the problem state. Eventually, cost-per-unit of service becomes a substitute for real outcomes, and the intent to find actual solutions diminishes. The remaiining “field” becomes the apologist for the system as the society moves its focus toward efforts with quicker payoffs. Any issue which is difficult or intransigent is put on a back burner in preference for work with quicker, more tangible payoffs.
    I have made the comment, with humor of course so that it could be heard, that if we took such an approach to our military or industrial endeavors, we would still be shooting muskets, flying biplanes and using water wheels to power our plants.
    I probably quote Eisenhower’s admonishment on the military-industrial complex (and Washington’s proscription against political parties) once a week.
    I enjoy your blog greatly; it gives me, and others of my friends I have suggested read it, a sense of hope. Keep up the great work.

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