Corporatism

The Rise of Corporations

  • In 1886, the U.S. Supreme Court legally recognized corporations as “persons” entitled under the Fourteenth Amendment to the same protections as living citizens.
  • Unlike average citizens, corporations have large flows of money at their disposal. With this money they hire lobbyists, donate abundantly to politicians, and sway public opinion with marketing and advertising ideas that increase their profit.
  • A corporation never sleeps or slows down. They are immortal.
  • Publicly traded stock corporations are explicitly designed to maximize return to an elite minority of stockowners.
  • Corporations externalize as many costs as possible and never reach an upper limit of profitability, because no such limit has yet been established. As a result, corporations keep getting larger and more powerful and continuously less liable.
  • International agreements, promoted by the United States, not only lowered taxes but extended corporate property rights and reduced the ability of other nations to regulate corporations differently.
  • In 1955, sales of the Fortune 500 accounted for one-third of U.S. gross domestic product. By 2004 they commanded two-thirds. This means that a few hundred corporations enveloped not only the commons but also millions of smaller firms organized as partnerships or proprietorships.

Corporate Capitalism

  • Corporate Capitalism is a term used in social science and economics to describe a capitalist marketplace characterized by the dominance of hierarchical, bureaucratic corporations, which are legally required to pursue profit.
  • The largest and most powerful businesses in the United States are corporations. A large proportion of the economy and labor market (50% or more) fall within corporate control.
  • Businesses that are not corporations usually have a sole owner or group of owners who are liable to bankruptcy and criminal charges relating to their business.
  • Corporations have limited liability and remain less regulated and accountable than sole proprietorships.
  • The shareholders appoint the executives of the corporation, who are the ones running the corporation via a hierarchical chain of power, where the bulk of investor decisions are made at the top, and have effects on those beneath them.
  • Corporate capitalism has been criticized for the amount of power and influence corporations and large business interest groups have over government policy, including the policies of regulatory agencies and influencing political campaigns.

 

  • Many social scientists have criticized corporations for failing to act in the interests of the people, and their existence seems to circumvent the principles of democracy, which assumes equal power relations between individuals in a society.

 

Economic Democracy

  • Economic democracy is a socioeconomic philosophy that suggests an expansion of decision-making power from a small minority of corporate shareholders (owners) to a larger majority of public stakeholders (non-owners).
  • While there is no single definition or approach, most theories and real-world examples of economic democracy are based on the assumption that modern property relations tend to deny the populace majority a democratic voice in economic policy decisions by giving private profit precedence over general well being.
  • Proponents of economic democracy generally agree that modern capitalism tends to hinder or prevent society from earning enough income to purchase its output production.
  • Centralized corporate monopoly of common resources typically forces conditions of artificial scarcity upon the greater majority, resulting in socio-economic imbalances that restrict workers from access to economic opportunity and diminish consumer purchasing power.
  • Assuming full political rights cannot be won without full economic rights, economic democracy suggests alternative models and reform agendas for solving problems of economic instability and deficiency of effective demand.
  • Models of economic democracy range from decentralization and economic liberalization to democratic cooperatives, fair trade, and the regionalization of food production and currency.

 

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