Consider the basic rights we in the Western world take for granted – the twin pillars of freedom and democracy, which define Western culture. Or so it seems. Strange, then, that when we think of the single most influential institution in our capitalist society, neither of these pillars are to be found. I write, of course, of the modern-day corporation: a fundamentally illiberal institution.
In this article, I’ll look first and foremost at American corporations, as American capitalism is at its most evolved – a signpost for days to come in Europe and beyond. The COVID-19 crisis, further, allows for the underlining of the social injustices of this system.
Corporation as the engine of Capitalism
The corporation stands at the nucleus of modern society. The vast amount of people work for big business, either directly or indirectly, and their livelihoods are dependent on their continued employment. The labour the workers produce is much more valuable than their wages – what Economics professor Richard D. Wolff defines as surplus in his 2012 book, Democracy at Work. This surplus is under complete control by the capitalists, who Wolff defines as the employers of the labourers and the owners of the means of production. This surplus, then, is used to enrich capitalists and cement their place in society. This is a well-established process, to the point that to even question the capitalist market system comes with a degree of social and political stigmatization – especially in the United States. It wasn’t that long ago that the very term “socialist” could sink political careers in the US, a trend changed only recently by Bernie Sanders.
But the owners of capital – those who count themselves among the major shareholders and members of the boards of directors of corporations – have enough influence to make any talk of true equality seem a fever dream. In what reads as an Onion headline, a 2010 Supreme Court ruling held that corporations have the same right as individuals to influence elections. This, despite the skewered amount of influence corporate lobbyists have over policy in the USA and beyond – a fact owed to the tens of millions spent by corporations to this end. Take Exxon, for example, its reach is described as the kind that allows its executives “easy access to every president”. Its confident CEO is “a peer of the White House’s rotating occupants” who can usually count on the administration to see things as he does. In fact, the president is often more pliable than the CEO, who often goes his own way, “aligned…with America, but…not always in sync; he was more akin to the president of France, or the chancellor of Germany…. His was a private empire.” Almost as if depthless pockets open all avenues to power.
Life holds no candle to profit
Corporations have the absolute authority to cut any number of their workers if holding onto them threatens the bottom line of corporate profitability. Take the recent announcement that Disney stopped paying 100,000 of its employees starting the week of April 20, 2020. The devastating societal effects this decision will have on each and every one of these employees is little different than the proliferation of globalizing forces in the 1970s and onwards which saw American corporations leave behind millions of middle-class Americans for the far cheaper workforce of Asia. It was this that brought about the rise of the economically vulnerable “precariat” class – 45,000 members of which kill themselves yearly, as summarized by Helen Epstein.
If you seek more persuasive evidence, all you need do is take a glance at the unemployment numbers in the United States – twenty million (and counting) for the period of March 12–April 12. Those numbers have not shrunk since – in fact, they’ve grown. While Europe is a far cry from exemplary in tackling the coronavirus crisis, the unemployment rate hasn’t skyrocketed. This is owed to the protections workers unions have negotiated with governments over long decades via collective bargaining. Perhaps the new depression triggered by COVID-19 is just the right time to introduce collectivization in a wider context.
A better way?
Professor Wolff argues in Democracy at Work that there is an alternative to the way corporations are currently run – Workers Self-Directed Enterprises (WSDE). At its essence, the WSDE offers “placing the workers in the position of their own collective board of directors, rather than having directors be non-workers selected by major shareholders… It is the tasks of direction – the decision making now assigned usually and primarily to corporate boards of directors and only secondarily to the major shareholders who choose them – that must be transferred to the workers collectively.”
Wolff’s chief example is the Mondragón Corporation in Spain, which has been in operation for over 50 years. Over this time, the corporation has grown to be one of the most successful businesses in Spain, and “now includes eighty-five thousand members in its constituent worker cooperative enterprises.”
The WSDE methods are neither new, nor revolutionary. A 1997 New York Review of Books article, Reinventing the Corporation, examines six novels dealing with the introduction of “collaborative methods” within corporations. Discussed are the problems a traditionally structured corporation meets in transitioning towards such starkly different methodology as well as, the benefits and issues during the transition period:
“Employees, as we shall see from a variety of studies, tend to be happier, more productive, and better paid under collaborative or participatory work arrangements. These arrangements, however, are often difficult to carry out. Not only must the work force be reeducated, but managers must be persuaded to accept diminished authority.”
It is a difficult shift, no doubt, but the novels discussed in the article make more than one compelling case for it. To even scratch the surface of such a challenging topic as this has been no easy task. Professor Wolff’s argument is not clear-cut – collaborative enterprises such as Mondragón suffer from their own share of problems. But to ignore the cracks in a system that fails time and again is to ignore the fundamental instability of the society we live in. It is to turn a blind eye to the necessity for change and a different way forward.
by Filip R. Zahariev
on the wall, Dennis AB, CC BY-SA 2.0
MEPs back joint Parliament-Commission register of lobbyists, European Parliament, CC BY-NC-ND 2.0