Nader's 'Corporate Socialism'

Great Debates
1

Say what you like about Ralph Nader’s Presidential bid in 2000, I think the man has a sharp mind, particularly when it comes to economics. In a recent Washington Post column, he efficiently outlines several points describing why the modern corporate culture growing in America is moving us away from a capitalist system. I found it to be an interesting article, summarizing several lines of thought I had been running along, and bringing a solid conclusion to them.

In other words, Nader verbalized some things that I had been thinking about, but he did it much more skillfully than I would have been able to… as usual.

Washington Post: Corporate Socialism

I’d enjoy hearing what Dopers think of this… are capitalist ideals being displaced by corporations and mega-corporations? Do mosern small businesses in America have any chance at the “even playing field” capitalism promises? Are modern mega-corporations anti-capitalist? Are they anti-American? If you agree with Nader’s premises, then is there a way out of this ugly situation? If you disagree, why?

2

I agree with much of what Nader said. Some corporations have gotten anti-capitalistic handouts. Recently the airlines got a handout.

No, the playing field is not level. Large corporations do have unfair advantages.

The only remedies are legislation or litigation.

3

Yes, it would have been far better if the airlines had gone out of business.

4

Are you contending that all the airlines would have gone out of business without the big government handout?

5

All?

No, not all. Not even most. But some, due to something that was likely a government screw up and not entirely their fault.

6

A sharp mind for economics? Nader knows next to nothing about economics, and his economic intuition is almost always wrong.

You can make lots of arguments to defend Nader, but economic brilliance isn’t one of them.

7

It’s sounds nice to me, but doesn’t have the statistical numbers or solid cites that really make a good argument. Those that believe it already will like it, but others will not have to re-evaluate their assumptions.

8

To use an old joke, Nader couldn’t spell “I.Q.” if you spotted him the I. But even a broken clock is right twice a day, and he’s not completely wrong here.

Nader is for socialism. I’m a firm believer in free enterprise. Unfortunately, what we see more and more is the worst possible combination of the two systems: one in which the public bears the costs of doing business when times are bad, while private enterprise reaps the profits when times are good.

Professional sports offer a good illustration. Under socialism, the city of Milwaukee would own and operate the Brewers, and would both pay for construction/maintenance of the stadium AND collect the money from fans. Under real capitalism, Bud Selig would either build or finance his own stadium, and then hope to attract paying fans (if he does, he gets rich; if he doesn’t, he goes broke).

Instead, we have the worst imaginable hybrid! The taxpayers of Milwaukee pay for the Brewers’ stadium, while the Selig family gets all the revenue that stadium yields.

The problem is more obvious in sport than in most industries, but we see the same phenomenon elsewhere. While I have no use for socialists or socialism, I can’t imagine it could be much worse than the monster hybrid system in place now.

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Note: I said “much.”

His conclusion, that the U.S. should establish some kind of central economic planning committee sounds like warmed over Communism. I suggested legislation. How about making all the laws apply to everyone equally?

For example, it is common in some states to pass tax breaks which apply to companies with, say, 5000 or more employees. This is not fair and should be unconstitutional.

10

The part that I have some quarrel with is summarized best by this:

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Sam: "Nader knows next to nothing about economics, and his economic intuition is almost always wrong. "

Sam, exactly how do you know what Nader knows about economics? Have you recently had the opportunity to engage in a Vulcan mind meld with him?

Nader is a lawyer who has worked for decades as a public advocate. Whether you agree with him or not you cannot simply say that he “knows next to nothing about economics.” On the same grounds I could say that Sam Stone “knows next to nothing about economics.” Or that George W. Bush “knows next to nothing about economics.”

That’s a debate?
astorian: “Nader is for socialism.”

Nader is not “for socialism.” He is a liberal. He is certainly not against “free enterprise.”

Nader’s position might be described as a belief that government and free enteprise should be mutually sustaining.

12

Just re-read my post and realized that for clarity’s sake I ought to have said he’s worked for decades as a consumer advocate, and advocate of the public interest. Sorry if “public advocate” gave a misleading impression.

13

Astorian,

I second Mandelstam’s opinion here…Where do you get the impression that Nader is for socialism? The substance of your whole post is basically indistinguishable from what Nader has said!

Nader has crusaded over the years for corporations and government to be more accountable to citizens, shareholders, employees, consumers… If that is socialism, count me in!

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Mandelstam: I base that opinion on two decades of reading and listening to what he has to say. When he starts discussing matters of the economy, he is usually spectacularly wrong. And not just because I disagree with him. He often shows that he doesn’t understand basic economic principles.

But I guess I’ll have to go dig up some cites for you.

jshore: Nader may not claim to be a socialist, but if walks like one, and talks like one… Whenever he opens his mouth, it’s to criticize business and free enterprise, and to propose massive government intrusions in the marketplace. If Nader could engineer the government, it would look pretty damned socialist.

I do agree with him when it comes to the unholy marriages of business and government. But why should business take the rap for this? It takes two to tango, and it’s the government that has the guns. Businesses must be competitive - they have pressures that force them to seek out ways of earning more money. If the government starts ‘helping’, then businesses will accept the help. They have to, because their competitors are. The fault for this lies squarely at the feet of government.

Nader also over-states the problem. Yes, corporate fraud and accounting malfeasance is a hot-button issue right now, but he’s trying to use it to paint a picture of business in America as being fundamentally corrupt. The fact is, the VAST majority of business transactions are honest. Most executives spend their day working honestly to represent their businesses and customers. Nader is painting with FAR to wide a brush.

15

part of the problem is that technology changed capitalism around 1900. having worked for IBM for four years i think corporations that large are not businesses, they are GOVERNMENTS. the capitalist ideology of the 1800’s is obsolete trash but people keep debating it on and on and on.

somebody called me a Ralph Nader Darth Vader type after reading my essay. may the green force be with you.

Dal Timgar

16

Some background on “corporate welfare” from the CATO Institute.

Obviously people can differ on what “corporate welfare” is.

Government must punish those who violate basic rules of fair dealing. When I see a corrupt CEO in an orange jumpsuit, wearing leg shackles and handcuffs, having to shuffle into court - then I will say the playing field has been leveled somewhat.

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Sam: “I base that opinion [of Nader] on two decades of reading and listening to what he has to say. When he starts discussing matters of the economy, he is usually spectacularly wrong. And not just because I disagree with him. He often shows that he doesn’t understand basic economic principles.”

Well, Sam, maybe if I had some details I’d know where, if anywhere, I can concur with you. But it’s simply pointless to introduce such generalities into a debate.

Although I respect you and mention this only to make a point, it’s very often the case that when you start discussing government regulation of the economy, you often show (as I see it) that you don’t understand basic principles. I base that opinion on more than two years of reading what you have to say.

Case in point:

" I do agree with him when it comes to the unholy marriages of business and government. But why should business take the rap for this? It takes two to tango, and it’s the government that has the guns. "

This statement is based on the erroneous assumption that people who criticize corporate welfare aren’t criticizing the government as well as corporations. How can that possibly be?

Whether it’s corporate welfare, or recent scandals concerning corporate accountability, whenever people call for government reform they are implicitly saying that government, as it presently is, has been inadequate.

When people criticize George Bush’s anti-watchdog appointee to the SEC they are criticizing the government. When they ask why Enron insider Thomas White is in a position to award lucrative army contracts to Halliburton, where the V.P.'s old boy network still resides, they are criticizing the government. When they say that government has not acted sufficiently to prevent fraud, they are criticizing the government. When they say that campaign finance reform is necessary to rid poiticians of their beholdness to special interests, they are criticizing the government. When the stock market drops after the President gives a speech, it is criticizing the government.

How can any of this possibly be seen as giving government a free ride?

Although I hesitate to attribute such illogic to you, you seem to assume that the only way to repair bad government is to have less government. You seem to ignore the simple fact that business depends on government to provide the stability without which capitalism cannot thrive.

Unless I have somehow missed the more nuanced view of government awaiting me behind your mantra-like invocations of “free enterprise,” it looks to me as though you do not acknowledge all of the ways in which business cannot do diddly without sound government.

Can we debate about the extent and nature of “sound government”? By all means. By let us begin by recognizing that business and government are and must be mutually interdependent, not antithetical.

Let us use both the terms “business” and “government” in a value neutral sense, describing qualities on a case-by-case basis and not ascribing sanctified status to the former, and anthrax-like vilification to the latter.

Nader’s proposals make “look pretty damned socialist” to you, but for some of us who want to see private enterprise operate more efficiently, they look pretty damned sensible.

As you may remember from a previous thread, even Adam Smith looked to government to balance capitalism’s irrational tendencies. As I see it Nader’s views embody the spirit of Smith’s thought more than do Milton Friedman’s.

18

Ending Corporate Welfare ,also from the Cato Institute,

Federal Aid to Dependant Corporations. From 1997.

19

I think a fair reading of the Green Party platform regarding corporations and economics would suggest that Ralph Nader supports a vision of America that is far, far more socialist than what currently exists. Granted, the platform states that : "This platform, . . . does not necessarily reflect in every respect the views of Green Party candidates at any level, including Ralph Nader and Winona LaDuke . . . " but I think it’s fair to assume that it at least represents a fair portion of his views if he ran for President on it.

Among the items called for:

Make corporate shareholders bear the same liabilities as other property owners. I should hope he doesn’t support this, since it would make little sense to simultaneously argue that shareholders are divorced from the decision-making proccess (as he does in the Post editorial), but that they should be responsible for any and all corporate liabilities. I don’t disagree completely that the limited liability provisions as they exist today provide too much cover for corporate wrongdoing, but I also understand that they provide a necessary diffusion of risk so as to encourage innovation. I’m sure there’s a better balance than what currently exists.

A public corporate charter review process for each corporation above $20 million in assets every 20 years to see if it is serving the public interest according to social and ecological as well as financial criteria. $20 million? Good heavens. According to a quick Multex search, there are 4,981 publicly-traded companies in the United States with a market cap in excess of $20 million. That, obviously, doesn’t include privately-held companies. Doesn’t setting the bar that low seem a little cumbersome?

Require breakup of any firm with more than 10% market share unless it makes a compelling case every five years in a public regulatory proceeding that it serves the public interest to keep the firm intact. 10 percent?? What if the other 89% of the market is divided between 30 competitors? I’d say that an entity who could get 11% of the market in that kind of environment deserves a hands-off treatment.

Or take the company I work for. It’s privately held, and currently holds around 51% of the market. It only has one other major competitor, and four or five small competitors. Our business? We distribute corporate news releases to the media. It’s been under the same ownership, by its founder, for 40 years. Does it need to be broken up?

  • Establish the right of citizens to vote on the expansion or phasing out of products and industries, especially in areas of dangerous or toxic production.* This is a bad, bad idea. I see no reason why product mix or industry development should be a matter for a popular vote. This kind of thing would be a target for fear-mongering and misinformation of the worst sort. Given the right resources and a smart PR team, I could get people to vote for eliminating coal-fired electrical plants.

Mandatory break-up and conversion to democratic worker, consumer, and/or public ownership on a human scale of the largest 500 US industrial and commercial corporations that account for about 10% of employees, 50% of profits, 70% of sales, and 90% of manufacturing assets. Why, for heaven’s sake? I don’t know how to run a corporation, and I suspect that most people don’t. If they did, corporations would simply publish want ads in the Sunday paper for CEOs and CFOs, and take applications from anyone who walked in. Spreading the decision-making process among a thousand people who don’t know what they’re doing isn’t going to be any better than entrusting it to a single individual who doesn’t know what they’re doing. What this sounds like is state capitalism like what existed in the U.S.S.R., and we all saw how well that turned out.

  • Mandatory conversion of the 200 largest banks with 80% of all bank assets into democratic publicly-owned community banks. Financial and technical incentives and assistance for voluntary conversion of other privately-owned banks into publicly-owned community banks or consumer-owned credit unions. * See above.

Place a 100% reserve requirement on demand deposits in order to return control of monetary policy from private bankers to elected government. This would kill the housing loan market, and in fact would kill the consumer loan market in general.

20

Mandelstam: You know, I think you’re guilty of lumping me in with ‘libertarians’ and assuming that I’m someone who always thinks that government is wrong. Go and read some of the threads I’ve participated in, and count the number of times I’ve said, “I think there is a role for government here”, or “It may be that we need more government oversight in this case”. There are lots of them. I’m a ‘best tool for the job’ kinda guy. Government is a bad fit for many of society’s ills, but in some cases it is necessary. Quite a few cases, in fact. Stop pigeonholing me.

And sure, business and government are both at fault. But only government has the power to stop this - if government is willing to get into bed with business, business with oblige. It HAS to. That’s the nature of the marketplace. The power to end the unholy marriage of business and government lies solely in the hands of the government.

It’s also equally distorting for labor unions to get in bed with government and receive special protections, btw. But Nader is fully in favor of that. Ask him how he feels about closed shop legislation sometime. Nader only complains when the businesses themselves get government perks. When it’s the workers or the people who use government force to seek an advantage over the market, Nader is all for it.