Conservatives in the U.S. generally subscribe to the notion of “Corporations are great and government is bad.” Granted that the world economy is driven by capitalism and corporations, they don’t have to revered with ideological or religious fervor. Like any other institution, there are limitations and disadvantages to corporatism. Even the founders of the U.S. were wary of corporate/banking powers and imposed severe restrictions on the scope and lifespan of corporations.
Let’s take a look at the nine common conservative myths about corporations
1. Free Market and Capitalism are always good for America: Many conservatives will accuse you of being “un-American” or a socialist if you criticize corporations, even ones such as Walmart.
However, Walmart buys $50 billion worth of goods from China every year. Walmart doesn’t believe in “Made in America.” Walmart alone is responsible for the demise of more than 300,000 American manufacturing jobs since 2001. Not very “American” or patriotic, is it?
Walmart also destroyed hundreds of thousands of small business owners in the U.S. If Walmart saved a lot of money by outsourcing jobs, it didn’t share the profit with its American employees. More than 600,000 U.S. Walmart employees make $12/hour or less (starting wage is at $9/hour).
Even in the hi-tech world, free market has resulted in loss of tremendous number of American jobs. IBM now has way more employees in India than in the U.S.
2. Capitalism brings prosperity: Although capitalism has helped the world in numerous ways, globalized and financialized capitalism has caused extreme inequality and poverty. A typical Walmart employee, making $25,000 a year, has to work 6 million years (really!) – and not spend a penny of it – to have as much wealth as the Waltons.
Thanks to contemporary capitalism, the top 0.1% of Americans have as much wealth as the bottom 90% combined.
When you look at how western corporations exploit workers in other countries, it’s even more obvious that capitalism doesn’t necessarily bring prosperity to all. In Mexico, workers get paid $2/hour to work on $40,000 SUVs; in Bangladesh, people work for $2/day – a day! – so that Nike and Macy’s can make gazillion dollars; and in Ethiopia, millions of farmers, including children, work hard to sell $1 of coffee beans which turn into $300 of fancy drinks at Starbucks.
3. You can work hard to get ahead and make money: Although this is true at an individual level, this cliché refuses to address the system. For example, one cashier at Walmart may work hard to become the general manager of the store, but it doesn’t change the total number of cashiers or their salaries.
40% of all American workers make $20,000 a year or less – and that’s below the inflation-adjusted minimum wage in 1968! – because the corporate system has created low-wage jobs. It’s not as if there are millions of six-figure-salary jobs that are just waiting for hardworking Americans.
4. Lazy people rely on welfare, Corporations don’t: When a Walmart/McDonald’s employee relies on food stamp, public housing and Medicaid, conservatives don’t see that it’s actually Walmart/McDonald’s which is getting subsidized by the government. You see, rather than paying its cashier $20/hr, Walmart pays only $10 and asks the government to chip in the rest. In accounting, it’s called “externalization of cost.” Huge multi-billion dollar corporations receive more than $250 billion a year in such cynical welfare handouts.
There are numerous examples of corporate welfare benefits.
- Big Pharma made $800 billion overcharging Medicare after lobbying for laws that eliminated price negotiations;
- Medicare and Medicaid are also gravy-trains for insurers, accounting for 60% of their revenue;
- military contractors cheat the government in numerous ways – wasteful projects, useless weapons, needless military bases, overcharging ($100 for a bag of laundry and $400 for a gallon of gas);
- bailout of big banks in 2008-2009 was a corporate welfare program worth trillions of dollars.
Corporations also rely upon the U.S. government to open doors and negotiate profitable deals with foreign countries. This is why a whole bunch of CEOs travels along with the President or the Secretary of State on foreign trips.
Sometimes, the government wages wars on other countries on behalf of multinational corporations – the “freedom and democracy” wars. Mainstream media will acknowledge this once in a while, as this NY Times article that describes how the CIA staged a coup in Guatemala to protect the banana plantations of United Fruit. The company also used Edward Bernays, the propaganda maestro, to convince the American public that the Guatemalan leader was a communist.
Corporate lobbyists regularly insert all kinds of subsidies and tax breaks in legislations. Whirlpool, for example, spent $1.8 million on lobbying and got $120 million in tax credits!
Also, if people knew how the Federal Reserve Bank really works, they will see that it’s the primary source of freebies for oligarchs and kleptocrats.
5. Regulations hinder corporations: Although regulations are pain in the neck for individuals and small businesses, large corporations often benefit from regulations! How? Many such regulations eliminate competition – for example, Big Pharma prevents importation of cheaper drugs from other countries. Other regulations make it expensive, difficult or impossible for small businesses to compete. Sometimes large corporations even fight the smallest competition – consider the laws against selling home-baked cookies or even little kids having lemonade stands without licenses!
6. Deregulation brings out the best solutions: Let’s take a look at what deregulation has provided us in the last few decades:
- mind-numbing, soul-crushing corporate media and entertainment
- toxic processed food that has wreaked havoc on peoples’ health; fake food full of GMO, herbicides, fungicides, pesticides, untested chemicals and artificial color/flavor
- factory farming that treats animals inhumanely, feeds them unnatural food, and pumps them with hormones and steroids
- 300,000 Americans dead from opioid overdose
- environmental disasters in developing nations which are struggling with staggering pollution, depleted groundwater, and industrial wastes.
- destruction of rainforests and ecological diversity
- chemical-intensive and industrial farming that degrades life-giving soil and indiscriminately kills bees and all beneficial insects
- $500 trillion of opaque derivatives that Wall Street uses to rig global markets and prices of commodities
- massive asset bubbles – housing, stock market etc. – that create wealth effect and then burst, creating more inequality and suffering
- dangerous advances in robotics and Artificial Intelligence
Moral of the story: Unfettered corporatism will kill us all.
7. Good Business Models Succeed: There are many business models like Amazon and Uber that wouldn’t succeed in a truly free market. They lose a lot of money, but they’re subsidized by banks and Wall Street. The goal of such corporations is simply to capture and monopolize the market.
8. Corporation and government are enemies: Conservatives don’t understand that the government is controlled by corporations. We live in corporatocracy. Oligarchs magnanimously bribe both parties through campaign contributions, lobbying, lucrative jobs for politicians and their family members etc. It’s a massive revolving door: military generals & military contractors; Monsanto and FDA; Big Pharma and CDC; Treasury Dept. and Goldman Sachs; politicians and corporations etc. If fascism is defined as a merger of corporations and the government, well, you can reach the logical conclusion.
9. Capitalism fosters democracy, freedom and liberty: Again, it’s true and false depending on the situation. While the Internet gives you access to vast information, corporations such Google, Facebook and Twitter censor what we read and thus actively mold our opinions. While cell phones and tablets are wonderful, CIA and NSA use them to monitor your actions, listen to your conversations and even record you through the camera. Drones and powerful missiles made by giant corporations are used to destroy countries and kill millions.
Capitalism and corporations are only as good as we design the system to be. As I described in a previous article, we don’t even have true capitalism or a free market – there’s only a network of interlinked international corporations controlled by a small group of elites. Power corrupts all institutions – governments or corporations. We need to implement proper checks and balances for multi-national corporations, more deregulation and tax cuts for authentic small business owners (not the hedge funds with ten employees), and better protection and negotiation power for workers. Else the neo-feudalistic model of Walmart will become the norm in all sectors of the economy. And that’s not how we MAGA.