“Don’t Blame the Company”

Paul Street

as Noam Chomsky argues, the conservative thought-controlling nature of the
corporate media is best seen in its “leftmost” or most liberal creations,
then Time magazine’s recent four-part exposé on corporate welfare
give us an especially good look at the boundaries of acceptable opinion. This
hard-hitting Fall 1998 series found that more than a year after the federal
government ended individuals’ entitlement to public cash assistance,
American corporations received $125 billion a year in federal subsidies,
grants, tax breaks, exemptions, credits, low-interest loans, and services, and
an incalculable amount of comparable public assistance at state and local
levels. The series attacks the conventional corporate and political wisdom
that such government assistance to corporations creates employment
opportunities for working Americans. Fortune 500 companies, the biggest
beneficiaries of this corporate welfare, “have,” according to Time,
“erased more jobs than they created this decade.” America’s massive
public handout to big business, Time argues, produces not jobs for the
many but profits for the prosperous few.

As surprising, perhaps, as
the series itself is its authorship by the prize-winning investigative
reporters Donald Barlett and James Steele. Barlett and Steele have solid
credentials as modern day muckrakers—middle-class populists with sharp eyes
for class injustice and the distortion of government policy by and for the
rich. Their recent books, including the best-seller America: What Went
(1992), construct relentless case-by-case indictments of “how the
rule-makers in Washington and the deal-makers on Wall Street” have rigged
government to “favor the privileged, the powerful, and the influential—at
the expense of everybody else.” In the Time series, as in previous
publications, their work is punctuated by sharply drawn contrasts between the
difficult experience of working people and luxurious lives of America’s
prosperous “elite.”


Real Villains”

for all its seemingly anti-corporate bluster, and despite the progressive
imprimatur of its authors, the series insists on an argument straight from the
heart of corporate hegemony in a neoliberal age who’s respectable
intelligentsia routinely conflates democracy with the rule of the market: the
real cause of corporate welfare’s obscene waste of taxpayer money is
government. In a carefully worded preface, Time’s editor-in-chief and
former Wall Street Journal managing editor Norman Pearlstine defends
the articles against the horrible possibility that some may call
this series anti-business by noting that their authors blame
corporate welfare on government officials—the “real villains” for
Pearlstine. What about the mendacious behavior of the companies? “I don’t
view them as villains,” says Pearlstine. “Business enterprises like
General Motors are designed to make money. They would be derelict if they
didn’t seek to avoid taxes and gain special subsidies.” Barlett and
Steele’s comment on corporations’ willingness to take money from states is
consistent with Pearlstine’s caveat: “Why not? Corporate executives, after
all, have a fiduciary duty to squeeze every dollar they can from every
locality waving blandishments in their face.” They conclude their first
series installment by quoting with approval Ohio State Senator Charles Horn, a
critic of tax abatements for corporations: “We know companies are
manipulative but it’s the nature of business to go after every dollar
that’s legally available. Don’t place the blame on the company; place the
blame on government. This is government’s folly.”

This perspective on
corporate mendacity is legally accurate but well to the right, morally
speaking, of the 18th-century Scottish political economist and current
neoliberal icon Adam Smith, who—as Chomsky has repeatedly shown—wrote
similar things about the selfish conduct of big businesspeople but condemned
that behavior as an expression of what he called the “vile maxim of the
masters: all for ourselves and nothing for other people.” It excuses and
downplays Time‘s own findings that corporations do considerably more
than respond to the windfall of government blandishments—they construct
their own advance corporate welfare “shopping lists” and make their needs
known to the relevant jurisdictions.

It also places the deeper
issue of why corporations can deploy so much power in the first place beyond
the realm of acceptable discussion. Who, Time asks, can blame
corporations, whose existence and selfish conduct it sees as immutable facts
of life, for raping taxpayers to the full extent allowed by the law? But
serious consideration of basic structural factors would show that the question
should be turned around. Who, in a world of centralized corporate ownership,
significant real and potential capital mobility, stagnating wages,
insufficient job creation, super-parcelized political sovereignty, and money-
driven politics, can blame American public officials for granting special
favors to large corporations? Time correctly notes the social
inefficiency and injustice that results when states, cities, and nations bid
against each other to reward corporations for constructing facilities that
market forces already require the private sector to build. But American
government officials are not part of some farsighted and benevolent
national-managerial class seeking the best possible allocation of material and
human resources for the country as a whole. They are jurisdiction-bound
political operatives whose tenure in office requires votes and Big Money
contributions to pay for campaigns so expensive that they effectively rule out
nonwealthy candidates with anti-business perspectives. Their claim to these
essential political commodities relies to no small extent on their ability to
credibly claim that they are preserving and creating jobs (especially “good
jobs” with big firms) within their jurisdictions, and this claim relies
largely on their service to Big Business. They are tails being wagged by the
corporate dog.



State Capitalism

Time series obscures another issue too radical for serious debate in
the mainstream media. As with much liberal and even left discussion of
corporate welfare, Barlett and Steele’s discovery and denunciation of
various specific and recent deals between public officials and private
corporations diverts attention from the more pervasive, systemic, and
indispensable (for investors) ways government supports corporations on both a
long-term and a daily basis. Numerous key and corporate-dominated industries
including auto, aerospace, steel, semiconductors, telecommunications,
electronics, modern agriculture, finance, and energy are and have long been
significantly socialized.

Since World War II, of
course, the single biggest source of state subsidy for the U.S. corporate
sector has been the Pentagon, which receives no explicit treatment in Barlett
and Steele’s Time series. It continues in this role despite the
collapse of the once seemingly indispensable Cold War enemy—for good reason.
Without the Defense Department’s legendarily anti-competitive and waste- and
fraud-ridden network of profit-guaranteeing “cost-plus” contracts, U.S.
capitalism as we know it would go the way of the recently murdered Aid for
Families with Dependent Children (AFDC) program, whose 1996 dismantlement
Barlett and Steele see as the result of “compelling” criticism: AFDC
“was unfair, destroyed incentive, perpetuated dependence, and distorted the
economy.” Much the same could far more accurately and significantly be said
of the Pentagon system and, indeed, of corporation capitalism—state
capitalism, if you prefer—but you’ll never read that in Time.


the Welfare State

series is premised, finally, on conservative myths about welfare for
the poor. Barlett and Steele rightly expose the hypocrisy of businesspeople
whose firms receive government assistance but who, in a sterling example of
the “vile maxim,” advocate cutting the safety net for the U.S.’s
considerable number of impoverished citizens. It is disheartening, however, to
see our “heroic” journalists make this point by advancing the vicious and
largely discredited idea that AFDC created generational welfare dependency and
poverty and by accepting the ludicrous notion that the punitive, miserly, and
controlling AFDC system “rewarded the poor.” Now that government has ended
the poor’s entitlement to the “reward” of cash assistance, they argue,
it should also subject corporate America to the alternately harsh and
liberating logic of the invisible hand of the market. Beneath this seemingly
liberal line of reasoning lurks the classically conservative (now called
neoliberal) and fraudulent assumption that things will turn out fine if we
just let the “free market,” not the “folly” of government, determine
life chances. Lost in this approach is the apparently obsolete left and
(modern but pre-neo-) liberal knowledge that market forces are almost never
egalitarian in either opportunity or outcome and that equality of condition,
not merely opportunity, is the true goal of democratic social policy. When, it
might well be asked, have large businesses ever prospered and “delivered the
goods” without widespread government intervention on their behalf?

Also missing is an
appropriate sense of relative public expenditure. In 1996, the year of its
elimination, AFDC cost U.S. taxpayers $18 billion, less than 1 percent of the
federal budget’s discretionary spending and equal to just 4 percent of the
$448 billion the federal government spent on what journalists Mark Zepezauer
and Arthur Naiman call “wealthfare—the money we hand out to corporations
and wealthy individuals.” Federal subsidies to the U.S. agribusiness sector
alone equaled the amount spent on cash assistance for the poor.



“Venerate the Economic System”

course, the corporate interests who provide Time‘s advertising
revenues cannot be expected to grasp the conservatism beneath the outwardly
liberal, anti-business tone of Barlett and Steele’s exposé. The officers of
America’s authoritarian corporations raise the plaintive cry of “class
warfare” at even the slightest mention of social inequality and corporate
responsibility. Concerned, no doubt, with the low public esteem in which
corporations are held (a 1996 Business Week survey that startled its
sponsors, 95 percent of Americans think corporations should cut their profits
for the good of workers and communities), corporate America is sure to zero in
on the Time exposé’s seemingly anti-capitalist message, leaving
discovery of the series’ deeper conservative essence to hopelessly alienate
radicals of the lunatic fringe. Interesting, in that context, is Time‘s
first issue following the four-part Barlett and Steele bombshell. Reenacting
the 1920′s “return to normalcy” after the social protest, labor
militancy, and Left activism of the Progressive and World War I eras, when
large numbers of true muckraker journalists and others questioned the still
youthful corporation system in substantive fashion, Time offers its
corporate comrades a conciliatory “special issue” on the “Builders and
Titans of the 20th
It’s all about those heroic, risk-taking capitalists who made America great,
like Nazi sympathizer and labor exploiter par excellence Henry Ford, without
whom—according to Time’s guest biographer, the noted
business historian Lee Iacocca—“America wouldn’t have a middle class
today,” and whose corporate progeny will soon face a class-action lawsuit
for profiting from the Holocaust. Time’s Hall of corporate
Fame includes world’s richest human and the modern day monopolist Bill
Gates, whose current unpopularity is “unfair” since “in certain ways his
career is distinguished by decency.” The special issue hails Sam Walton for
his supposedly worker-“empowering management techniques” but fails to
mention that notoriously low wages and related antiunion tactics are an
integral part of Wal-Mart’s labor policy as fashioned by its late founder.

The “Builders and
Titans” issue includes corporate apparatchik Pearlstine’s nomination of
General Electric as the “company of the century” in a paragraph that
manages to discuss that firm’s remarkable rise to power (its current
capitalization is $32 billion) without mentioning its status as the world’s
largest defense contractor.

Consistent with the
requirements of corporate media liberalism, which hold that the most effective
defense of existing class and power relations incorporates (albeit
superficially) some left language and analysis, the special issue tweaks
corporate leaders past and present for too commonly being “simplistic,”
“uninformed,” and “authoritarian” when “discussing society’s
broader issues” and setting company policies. “We must recognize,” Time
further acknowledges, “that markets are messy—frequently overshooting or
undershooting desired targets—and that it is ordinary working people, not
investors, bankers, and business leaders who suffer most when they do.”
Still, in the last analysis, Pearlstine claims that Time has good
reasons to “venerate business leaders and the economic system that allows
them to flourish.” “If the twentieth century was, as [Time founder
Henry] Luce said, ‘the American Century,’ it was,” he gushes, “largely
because our system, espousing freedom of the markets and freedom of the
individual, rewarding talent instead of class and pedigree, bred a group of
leaders whose single-minded fixation on getting rich—and creating great
products along the way—led to unheard of levels of productivity and
prosperity.” There’s not much room in that formulation for the significant
extent to which modern U.S. capitalists and their corporations have depended
on regular state protection or for the limits of “individual freedom”
experienced by the tens of millions of Americans whose lack of economic
resources and market power restrict them to working-class status. There’s no
sense of the negative social and environmental impacts of the system’s
products and services.

Strange as it may seem, Time’s
series on the “folly” of corporate welfare may be more reactionary in
effect than the most nakedly pro-corporate and
anti-government/anti-worker/anti-environment tirade on the Neanderthal
editorial page Pearlstine once supervised for the Wall Street Journal.
It’s not just that the series is riddled by core conservative and capitalist
messages. By containing those messages in seemingly populist prose—in
language that partly acknowledges difficulties in the operation of the
dominant political-economic system while denying readers a critical sense of
that system’s underlying structural and historical essence—the series
marginalizes serious criticism of modern state capitalism in ways that more
transparently pro-corporate propaganda would not. It also reinforces the
illusory sense that significant, democratic, and wide-ranging ideological and
policy debate occurs within the propagandistic, narrow-minded, and
thought-controlling realm of the corporate media. In this, as in other
examples, the real triumph of modern media conservatism is ironically found in
the media’s most liberal and “leftmost” productions.

Paul Street is a research associate and adjunct history instructor at Northern
Illinois University. His articles have appeared in
Monthly Review, Journal of Social History, and Mid-America.