"Reader Comment/Response"July/August 2012 issue of Poverty & Race
john a. powell & Stephen Menendian, in their thoughtful essay, “Beyond Public/Private: Understanding Corporate Power,” Poverty and Race, Nov./Dec., 2011, use the term “corporate power” as the “behemoth in the boardroom,” the force, the 1% (although they don’t use that term) that should be the target of change. They make the important point that the line (i.e., 1%/99%—they use the term “circle of human concern” and “membership in the community,” in the same way Occupy speaks of the 99%) is not between private and public, individuals vs. the government. The target should not include “entrepreneurs, small business owners, farmers, workers… [who] are all swept up into the “private sphere.”
Being clear on what “private” means is very important politically and ideologically. The sanctity of the personal private is a cornerstone of democratic belief, an essential aspect of what freedom means. Applying “private” indiscriminately to Goldman Sachs, the small business owner, the corner grocer, and the individual person gives Goldman Sachs a cloak of moral standing it does not deserve. So far so good.
But what is the line that divides Goldman Sachs from the small business owner? powell and Menendian suggest it is “corporate power,” but they explicitly deny that their position is anti-capital: “the case against corporations is not anti-capital.” But of course it is “anti-capital”: What differentiates Goldman Sachs and the 1% from the small business owner and farmers and workers is the ownership and control of capital. “Ordinary citizens” are not “powerful corporate actors” because they don’t control capital, the wealth that would give them power. And while some, perhaps most, owners of capital use the corporate form, which is specifically designed to permit the aggregation of capital and its use to accumulate further capital, some don’t; it’s not the legal form that counts. Hedge funds control capital whether they are incorporated or not.
Being clear on the source of the undesired power of corporations is important politically. Acknowledging the reality of capital, and the capitalist system that enshrines its use, naming the system, clarifies who’s the 1%, who’s “Wall Street,” and avoids the public/private trap. That’s why conservatives shy away from the use of the words. The conservatives realize that. As Peter Dreier has pointed out in a recent issue of Dissent,
Frank Luntz [Republican strategist and Fox News commentator] … urged Republican politicians to avoid using the word “capitalism.” “I’m trying to get that word removed and we’re replacing it with either ‘economic freedom’ or ‘free market,’” Luntz said. “The public…still prefers capitalism to socialism, but they think capitalism is immoral. And if we’re seen as defenders of quote, Wall Street, end quote, we’ve got a problem.”
We shouldn't go along.
Peter Marcuse (email@example.com)
Menendian/powell response to MarcuseWe’d like to thank Peter Marcuse for his interest in our article, and his thoughtful response. Peter questions whether our critique of corporate misalignment is truly not anti-capital. Moreover, he argues that the difference between large-scale, global corporate actors and small business owners and private individuals is in fact capital itself.
While we agree that the scale of capital owned and controlled by Goldman Sachs, banks and other corporations like Apple or Google vis-à-vis the small business owner or farmer is different, it is not capital itself that is the issue: It is the misalignment of corporations in our democracy. It is the exercise of political power, influence and the channels that allow corporations to manipulate and distort the democratic process.
Corporations—even monopolies— that use their capital to serve the broader society, as corporations were charged and required to do in the early years of the Republic, were not inherently problematic. While the concentration of private economic power can harm the economy, our focus is on the mechanisms that allow the translation of economic power into political power and influence. Decisions such as Citizens United are one such example, and which allow unlimited independent expenditures.
As John Rawls suggested, in a democracy the economy should serve the people, and not the other way around. The scale of corporate power today, and the concentration of that power, distorts not only the economy, but our democracy. It is these distortions, and the mechanisms that channel them, that are the problem, not capital itself.
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