Searle, re: the Wal-Mart story
Here are the thoughts of a couple of writers that provide a good perspective by which to view the Wal-Mart story.
Wendell Berry:
"The shift of colonial power from European monarchy to global corporation is perhaps the dominant theme of modern history. All along, it has been the same story of the gathering of an exploitive economic power into the hands of a few people who are alien to the places and the people they exploit."
oriononline.org
and
"THIS MORAL AND ECONOMIC absurdity exists for the sake of the allegedly "free" market, the single principle of which is this: commodities will be produced wherever they can be produced at the lowest cost, and consumed wherever they will bring the highest price. To make too cheap and sell too high has always been the programme of industrial capitalism. The idea of the global "free market" is merely capitalism’s so-far-successful attempt to enlarge the geographic scope of its greed, and moreover to give to its greed the status of a "right" within its presumptive territory. The global "free market" is free to the corporations precisely because it dissolves the boundaries of the old national colonialisms, and replaces them with a new colonialism without restraints or boundaries. It is pretty much as if all the rabbits have now been forbidden to have holes, thereby "freeing" the hounds.
The "right" of a corporation to exercise its economic power without restraint is construed, by the partisans of the "free market", as a form of freedom, a political liberty implied presumably by the right of individual citizens to own and use property.
But the "free market" idea introduces into government a sanction of an inequality that is not implicit in any idea of democratic liberty: namely that the "free market" is freest to those who have the most money, and is not free at all to those with little or no money. Wal-Mart, for example, as a large corporation "freely" competing against local, privately owned businesses has virtually all the freedom, and its small competitors virtually none.
To make too cheap and sell too high, there are two requirements. One is that you must have a lot of consumers with surplus money and unlimited wants. For the time being, there are plenty of these consumers in the "developed" countries. The problem, for the time being easily solved, is simply to keep them relatively affluent and dependent on purchased supplies.
The other requirement is that the market for labour and raw materials should remain depressed relative to the market for retail commodities. This means that the supply of workers should exceed demand, and that the land-using economy should be allowed or encouraged to overproduce."
resurgence.gn.apc.org
and John Ikerd:
More “cheap stuff” can never offset the destruction that results from a dysfunctional society with no sense on caring and compassion for each other and with no sense of morality or stewardship responsibility for those of the future....If we are going to build this new and better world, we are going to have to have new ways of thinking about the decisions we make today – beginning with a new way of thinking about economics. Our current economic system is designed and programmed to provide humanity with “more cheap stuff.” That is all it was ever meant to do – to use the scarce resources of the earth more efficiently in giving people, as consumers, more of what they want.
In times past, more cheap stuff may well have been what humanity needed most. A couple of hundred years ago many people lived lives of drudgery – many starving, freezing to death, or struggling day-to-day with pestilence and disease. But those times are long past – at least for most of the world. The system of competitive capitalism gave people food, clothing, and shelter and helped people lead longer, healthier lives. But, in the process of producing more cheap stuff, it has depleted the resources – people as well as nature – upon which its future productivity must depend. It is destroying itself as it destroys human society and destroys the natural environment. It has evolved from a system of competitive capitalism to a system of industrial corporatism that has become a cannibalistic system for reckless resource exploitation rather than rational resource use. The corporatist economic system of today cannot possibly support another fifty years of human progress. It is destroying the very things that must be restored before humanity can take its next step forward.
We must find a new, shared vision for the future of humanity, and it must be built on a new economic foundation. Our focus on short run, self-interest and our worship of economic materialism is a major contributor to, if not the sole cause of, nearly every major problem we face in today’s society. Nearly every incident of environmental degradation and destruction is a consequence of economic rationalization that the earth’s resources are ours for the taking. Hunger and disease in the world are not consequences of a lack of food or medicine, but of our acceptance of the economic logic that only those who are willing and able to pay are deserving. Our blind faith in free-markets has caused us to surrender both the private and public sectors of our society to corporate control. Our political campaigns are planned and paid for by the corporations who then have access and influence, if not outright control, of the politicians who are supposed to represent the people. Any positive vision for the future of humanity must be based on a new and different vision of economics – as E.F. Shumacher said, an “Economics as if People Mattered.”
The economy of the future must focus on people rather than production and profits. To achieve such an economy, we must challenge the economic assumption that people are best served by ever-increasing production and profits. Economists argue that since people invariable prefer more money to less, more money obviously enhances our quality of life. Thus the more we produce, spend, and consume the higher will be our quality of life. Economists argue that any means we might choose to address the ills of society invariably costs money, and more money comes only from increased production. Production creates jobs from which people pay the taxes, and those taxes support various social services. Economists argue that only the affluent can afford to protect the environment. So, we must continually increase production if we are to have the wealth from which we derive the means of caring for the natural environment. To economists, the well being of people is simply some linear transformation of production and profits – the greater the production, the greater the profits, and the higher the level of human well being.
However, the foundation for contemporary economic thinking is based on observations of the world of 200 years ago, not the world of today. Adam Smith’s observations in his 1776 book, The Wealth of Nations, are simply not relevant to the society of today. None of the assumptions needed to ensure that the pursuit of short run, self-interest is transformed into long run, societal benefits – as if by an “invisible hand – are present in the world of today. There are no longer large numbers of buyers and sellers, but instead a few giant corporations, which make a mockery of the concept of competitive, capitalistic, free markets. It is not easy to get into enterprises that are profitable or to get out of enterprises that are unprofitable, and thus, to give people more of what they want and less of what they don’t want. Patents, specialized equipment, and large capital requirements represent formidable barriers to entry and exit. Consumers do not have accurate information concerning the value they will realize from whatever they buy, but instead are confronted with disinformation by design, in the form of persuasive advertising. Finally, the consumer is no longer king. Consumer sovereignty went by the wayside when advertising agencies began hiring Ph.D. psychologists to warp and bend consumer tastes and preferences to fit the desires of corporate producers.
There is absolutely nothing in existing economic theory to support the proposition that today’s economy is performing for the benefit of society as a whole. There is far more support for the proposition that today’s economy is functioning solely for the benefit of giant corporations and that any net benefits for people are but a side-effect of the pursuit of corporate profits and growth.
Economists have all sorts of rationalizations for continuing to worship at the altar of “free-market economics” during an era of corporatist reign. But none of them stand up to the ultimate test of common sense. The concept of “workable competition” is not workable in a corporatist economy – there quite simply is no longer an “invisible hand” of impersonal competition to transform greed into good. The simple fact that people have jobs and make money doesn’t necessarily mean that they are willing to pay higher taxes – or that higher taxes and more social services necessarily translate into greater societal well being. We need a society in which people recognize their interdependence, understand that they are all part of the same whole, and truly care about each other. More jobs and more money simply don’t translate into acceptance of social responsibility. Our social responsibilities will be met through understanding and compassion, not through the pursuit of greed.
and this:
Over the past several decades, America has evolved from a capitalist to a corporatist economy and from a democratic to a corporatist society – we have traded democratic capitalism for corporatism. And in the process, we Americans have lost our independence.
Corporatism is defined by Webster as “the organization of a society into industrial and professional corporations serving as organs of political representation and exercising some control over persons and activities within their jurisdiction.” Corporatism means that we participate in society as members of groups, which not only represent us but also exert control over us. Corporatism means that we participate in the economy, not as individuals but as members of organizations – as workers, owners, or managers of corporations. Corporatism means that we participate in the political process, not as individuals but as members of organizations – as members of labor unions, corporate business organizations, political action committees, or other special interest groups. Corporatism means that we let someone else make our economic and political decisions for us.
Corporatism is a natural consequence of the process of industrialization. The processes of specialization, standardization, and centralization characterize the industrial paradigm. Specialization, with each person or unit performing fewer functions, allows each function or step of a production process to be performed more efficiently – i.e. division of labor. Standardization allows the various specialized functions to be controlled and integrated into an efficient overall production process – i.e. assembly line production. Specialization and standardization allow, in turn, efficient centralization of management and consolidation of control – i.e. economies of scale.
Economies of scale allow fewer firms or business organizations to grow larger and thus to gain greater control over the total output of an industry. As business firms become fewer and larger, they acquire increasing market power – the ability to reduce wages and buying prices and increase selling prices – leading to further economies of “size,” still greater market power, and chronically declining competitiveness of markets. Labor unions and other special interests groups emerge to counteract the power of large industries to exploit their workers, civil society, and the natural environment.
An industrial organizational structure has evolved to facilitate specialization, standardization, and centralization of control. Organizations are separated into specialized units – divisions, sections, departments, etc. – so as to facilitate gains from specialization. The function of each unit then must be specified and standardized so that all units work together effectively to achieve the overall purpose of the organization.
This same organizational structure has characterized private for-profit corporations, special interest groups, and government organizations – all specialize, standardize, and centralize to achieve efficiency. Each organization, and each division, department, and workgroup within the organization, performs a specialized, standardized, function. Control of the organization can then be centralized, allowing a few key decision makers to make decisions which exert control over the people within the organization while claiming to represent them to the outside world. The corporation speaks for its stockholders and employees, the labor union speaks for its members, and Political Action Committees speak for their contributors. People participate in society “through” these various types of corporate organizations – not directly, as independent individuals.
ssu.missouri.edu |
