Posts Tagged ‘ regulatory capture

Multinational Corporations: The Roving Band of Armed Thugs Argument Writ Large

I’ve introduced Jim Rigby in a post before. He’s a thought provoking writer and an open-minded conversationalist. He posted recently in support of a Noam Chomsky article. I responded to the shared post on Facebook (I think it’s a public post). In short, I’m responding to Chomsky’s point, reiterated in Jim’s article, that the state is the correct means to keep corporate power in check:

. . . the idea that increasing the power of the state would somehow decrease the power of the corporations that are protected and funded by the state requires some explanation at the least. To imagine that by voting, petitioning, protesting, etc., the government can be made to protect people from concentrations of capital and privilege requires deviating from all historical precedent . . .

Skipping down a bit to where Jim responds, with his usual politeness:

Jad, I am certainly happy to discuss where we disagree. I just didn’t want seem like your excellent arguments were unwelcome. I see corporations as concentrated private power. They are undemocratic and so unaccountable to the people. The state may create the legal definition of a corporation, but those private powers would still exist if we were to shut down the US government tonight. It is true that a corporation like Monsanto would not have to go through the charade of getting around government regulations, and they wouldn’t get government funding were there no government, but they wouldn’t not whither and die in my opinion. I believe they would simply take what they want as they do all over the world where governments are weak and cannot protect their people. If like some foreign corporations they hire their own private army, there would nothing to stand against them. However bad our situation is in the States, it is infinitely worse in nations where corporations are stronger than the local governments. The smaller the government the more tactics like capital flight make it impossible for people to collectively stand against corporate tyranny.

Here beginneth the actual post:

The power of concentrated corporate wealth is astounding, terrifying, and is a daily menace to the well being of humans all across the globe. No informed person with any empathy or degree of integrity can defend the existence of these behemoths who are, as you rightly note, undemocratic and unaccountable to . . . well, anybody–other than, perhaps a heavily invested shareholder.

It’s true, as well, that, were the United States government shut down tonight, Monsanto wouldn’t simply go away. But it would begin a very rapid decline. Contrariwise, since the US government isn’t likely to shut down any time soon, Monsanto will continue to grow in size and strength. Even if GMO’s fall out of favor, Monsanto has reinvented itself before (after DDT and PCBs became unpopular). It’s essential to understand that the unimaginable amounts of capital that Monsanto and the few thousand largest corporations have gathered didn’t come to them overnight. It’s been assembled, almost entirely through political means and specifically war profiteering, over the last 100 years.

One paragraph, super-brief history: After it’s founding at the turn of the 20th century, Monsanto grew rapidly as the fledgling American Empire found the need to assemble and enshrine a domestic chemical manufacturing base as it faced war with its suppliers in Europe. As the American war machine grew and spread around the world, Monsanto was contracted by the United States government to help develop the nuclear bomb and build the cold war nuclear arsenal. They also made a fortune selling DDT which the US military sprayed all over in Europe and the South Pacific to protect invading soldiers from disease. Monsanto was also an important manufacturer of Agent Orange during Vietnam. Despite not having almost no success in creating products for consumers, Monsanto has become one of the largest concentrations of wealth on the planet.

Besides channeling wealth from the working class to the war profiteers, the federal government provides key protections without which Monsanto and its ilk would quickly disintegrate. Perhaps the most important is protection for intellectual property. The United States legal system and enforcement apparatus recognizes Monsanto’s absolute ownership of certain genetic patterns. Independent farmers using non-GMO seeds are sued and have their land and products seized when Monsanto crops cross-pollinate. Other farmers who choose to stay out of the Monsanto GMO supply chain face a constant threat of losing their livelihood should an unfortunate wind blow.

The decisions of legal system are enforced, not by the private armies that you fear, but by federal agents. US corporations get their private armies, intelligence services (CIA) and diplomatic corps (State Department) without even having to pay for them. The relevant power dynamic isn’t between the corporation and the weak national governments, as you mention above, but between the weak national governments and the US government. Monsanto has an “in” anywhere around the world where the US government has influence over the local government. This global enforcement of “free trade” is paid for by the working class here at home, while the corporations reap the profits and the poor around the world suffer the side-effects.

Click to enlarge: An unweildy but informative graphic showing the degree of “regulatory capture” Monsanto holds over the Federal state.

Corporate concentrations of capital and power do not obtain despite government interference; they would not have been achieved without government interference. Precisely the same is true for most of the monstrosities that sit astride the chest of humanity: GE, Dow Chemical (very similar trajectory to Monsanto), Exxon, Shell, General Motors, and so on.

This is not to say that everything produced by chemical processes and industrial manufacture is a priori bad. The organic nature of production for things of general (accountable, democratic) use to humanity is extraordinarily decentralized. This is wonderful for consumers, who can hold small, localized entities to account, but terrible for a centralized, militarized state, who needs single points of audit and control to drive industry in particular ways.

Gabriel Kolko demonstrates this rigorously in The Triumph of Conservatism. His evidence was among the most important in convincing me that there was no golden age of government regulation. The history of regulation is the history of eliminating small, local businesses and manufacture to assist in the ascendency of todays awful multi-national corporations.

If you’ve read this far looking for a reference to The Roving Band of Armed Thugs Argument, there it is. In short, a common argument for the necessity of a centralized, powerful monopoly on violence is that, without it, we’d be overwhelmed by crudely armed bad actors (roving bands of armed thugs). Because of that abstract (and fairly absurd theory), most folks put up with, encourage and pay for roving bands of armed thugs which actually are a plague in most metropolitan area (the police) and around the world (the US military). Similarly, in the name of preventing unaccountable accumulations of private wealth, most folks put up with encourage and pay for an agency of force that expropriates or destroys small accumulations of wealth and channels the resources, protections, and patronage into a few hands. Thus, in both cases, people are bamboozled into accepting something precisely the opposite of the actual solution to the problem they imagine.