Commentary
America's Troubles with Capitalism

"Corporate socialism," defined as "the privatization of profit and the socialization of risks and misconduct," is anathema to American capitalism and is one of the factors causing the U.S. economy's downward spiral.

By CARLOS H. CONDE
Bulatlat.com

I was just about to start a column on the penchant by President Gloria Macapagal-Arroyo to call her critics "communists" when a New York Times news alert arrived via email. "Dow Falls 390; Index Near 4-Year Low," it said.

"Stocks fell sharply today as bad news about several large companies added to an atmosphere on Wall Street that has already been soured by accounting scandals and company collapses that have weighed on investor confidence," the alert grimly noted. A few seconds later, another news alert arrived: "Dow Jones industrials fall more than 400 points."

If this trend continues (and there are signs that things are going to get worse before they get better), Wall Street will probably be seeing its worst year this year since the '70s. Even as Dow Jones was sinking, reports were saying that "bad earnings projections" and more criminal investigation on companies with Enron-like troubles are afoot, thus unsettling investors even more.

It may be premature to say that the U.S. economy is on a tailspin but it certainly is hobbling. The corporate scandals rocking the U.S. economy - the Enron collapse, the WorldCom and Xerox scandals, and President Bush's previous involvement in questionable transactions - are taking their toll.

As the New York Times reported yesterday, "The persistence of the decline has made it harder for companies to raise capital and has eroded the retirement accounts and stock portfolios of many Americans." Americans are understandably edgy. The economic troubles facing America right now will have far-reaching implications throughout the world, particularly on countries dependent on the United States, such as the Philippines.

In a highly-globalized economy marked by the continued dependence of poor countries like ours on the United States (the US is our largest export market for a number of prime products), each time the U.S. sneezes, we all get the flu. This reminds me of the consistent statements from the Left that, if the U.S. will continue with its rapacious ways, it will implode. The Left has said time and again that the greed of big business - in the U.S. and elsewhere - will be capitalism's undoing.

In the case of the U.S., this greed is abetted and condoned by the government. In an article in The Washington Post, Ralph Nader enumerated the many sins of corporate America and the U.S. government that are "displacing capitalist canons." He argues that the two have conspired to undermine the principles of capitalism by violating its pillars, that businesses under capitalism are supposed to sink or swim. But the U.S. government has provided subsidies and bailouts for a host of big companies, many of them deemed "too big to fail."

As a result, the government loses public money in saving these companies. As a result, too, the playing field is all but level, with the government and big business getting ever cozier with each other.

"We have a government of big business, by big business and for big business," Nader wrote. He argues that this "corporate socialism," which he defines as "the privatization of profit and the socialization of risks and misconduct," is anathema to American capitalism. Nader urges the "civic and political movements (to) call for a decent separation of corporation and state."

Nader's exhortation, while well-meaning, is naive. In a capitalist society, the corporation is THE state. Breaking up the two requires a revolution. Bulatlat.com

We want to know what you think of this article.