The U.S. and other developed nations preach the value of capitalism to developing nations like Pakistna, however they no longer follow this model themselves. The corporate take-over of media, culture, as well as business has killed capitalism by limiting its social benefits that allow for small businesses with innovative new ideas to rise and be rewarded by the free market. Corporate control denies us free choice to buy the most innovative product, but rather we are forced to buy products from the handful of companies that control advertisement and more generally, the information we receive.
As capitalism is held as a pillar of the American social order, our understanding of this economic model affects the aid and advice given to nations like Pakistan. First, one must recognize that there have been great benefits of the corporate model throughout history and it is a required model to deliver the safest product for the lowest price in large industries like automobile manufacturing. However, the issue with capitalism as it currently stands, is that it allows for corporations to summarily take over all sectors of business and society. While one may not call these monopolies, one certainly can recognize there is an oligarchic order to the way in which unchecked greed and corporate expansion leaves money and power in the hands of few.
In 2004, Ben Bagdikian’s book, The New Media Monopoly, shows that only five corporations operate 90% of the mass media controlling almost all of America’s newspapers, magazines, TV and radio stations, books, records, movies, videos, wire services and photo agencies.” Corporations such as Time Warner, Viacom, and News Corp are thus constantly affect the way in which we choose products, but also the way in which we value ideas.
Further, if one looks to the amount of money corporations invest in political campaigns, lobbying, and generally currying favor with Congressmen, their dominance becomes even more menacing. Companies like Xe, formerly known as Blackwater, offer services to the U.S. military and government which were previously handled by the military itself. With ex-military and State Department employees as their leadership, these corporations have even effected U.S. war strategy and foreign policy; but are mercenaries who were never elected or known by the public.
There are some popular arguments used to support the current corporate model of capitalism; one being that the founders of this nation based the constitution around a capitalistic model. However, the manner in which the founders abhorred monopolies and the British elite, exhibited that their conception of capitalism differed from the corporate model of today. The founders’ ideal of capitalism was more attuned to a democratic institution: as the people choose the best candidate to elect, so does the market freely choose the best product to buy and company to support.
The current perception of capitalism is out of sync with the founders, many of whom were small business-men themselves. The disproportionate corporate control of markets and influence in government creates oligarchies which are antithetical to the democratic constitution. Justice Louis Brandeis of the U.S. Supreme Court once said, “We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.” Thus the right to choose unhindered by persuasions and control by corporations is essential to effectuate the true benefits of our capitalistic order.
The proponents of our current system may point to just a few decades ago when Microsoft and IBM were started in college dorm rooms and garages, and are now billion dollar corporations. The argument further provides support for the capitalist model as the internet and computers greatly improved the human condition across the globe and served a true social good. In fact, Bill Gates provides hundreds of millions of dollars to schools in African and India, and has created his corporation in a socially positive manner.
However, my question is could a Microsoft or IBM rise to such power today? These companies rose with a new product for which there wasn’t a market nor was there corporate control, and thus they were able to freely compete which improved their products as the companies developed. But now, if a small business comes up with an innovative concept it is bought out by an already existing corporation. While this small business owner gains millions of dollars he didn’t have before, he also loses the ability to form a multi-billion dollar corporation LIKE Microsoft in the manner he wished to. Thus, our ability to choose products from the producers is greatly limited by corporate control.
I spoke to a friend of mine who grew up in New Hampshire and he told me that small business like clothing retailers, restaurants, and coffee shops are in fact preferred in his area. Many communities have rejected corporations like McDonalds because they believe in the true form of capitalism which rewards small business. Yet, the majority of the American system has experienced the terrible costs of allowing unfettered corporate greed. However, by realizing the existence of the corporate control over information we receive daily from t.v., magazines, or newspaper, some power can return to the consumer.