Capitalism or Corporatism? - Exposing The TruthThe United States is built upon an economic system to which we have applied the label “Capitalism.” We have been conditioned to believe in the virtues of this system, and we often accept this uncritically. We are told that capitalism is far better than socialism, communism, fascism, etc. And yet Noam Chomsky, when asked what he thought about capitalism, replied, “I think it’s a great idea if we were to ever try it,” (Chomsky, 2002). The question we must ask is, what does Mr. Chomsky mean when he says such a thing? To answer this question, we must explore the dichotomy between the theory of capitalism, and capitalism as it has come to be practiced in reality.

The US was created during the American Enlightenment, and its political ideas were based primarily on the philosophy of John Locke. Locke argued that people have certain inalienable rights such as the right to life, liberty and property (Stanford Encyclopedia of Philosophy, 2009). It is this right to the private ownership of property that is central to capitalist theory. Socialism and communism, by comparison, are essentially collective ownership of property. The question of capitalism turns on the word “private.” To Locke, private ownership of property meant ownership by persons. This is an important concept because if a person is able to own property, then that person is presumably able to own the product of his or her labor. The central tenant of capitalism is the idea that the individual can trade his labor for property in its various forms.

The issue that exists today is related to the word “person.” In Locke’s day, the word “person” was used to describe a living, breathing human being. That definition has changed since then. It was with the introduction of the 14th amendment to the US Constitution that the courts began to redefine the word “person.” The 14th amendment was implemented at the end of the Civil War as a means of ensuring all people (particularly the recently freed slaves) equal protection under the law. The 14th amendment reads as follows:

SECTION 1.

All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the state wherein they reside. No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.
14th Amendment to the United States Constitution

Capitalism or Corporatism? - Exposing The TruthCorporations soon began to use this law to their advantage. In 1886, the Supreme Court case of Santa Clara v. Southern Pacific Railroad Company resulted in a ruling in which it was determined that corporations were “persons” under the law and thus could use the 14th Amendment to protect their rights. This meant that corporations were now entitled to free speech, protection from searches and seizures, and could not be discriminated against. Suddenly, corporations (artificial persons) had the same rights as real people (Hartmann, 2010). With that, the floodgates were opened, and corporations began using the 14th amendment to consolidate corporate power. Indeed, of the 307 14th Amendment cases brought before the Supreme Court from 1886 to 1910, only 19 dealt with African Americans, while 288 were lawsuits brought by corporations seeking to expand their newly acquired rights as Constitutional “people” (Hartmann 2010).

With the acceptance of the corporation as a legal “person,” corporations could now own property as persons. The result of this has been that vast amounts of property are owned and controlled collectively, in the form of the corporation, while maintaining the illusion that said property is actually owned individually. We now consider this to be “private” ownership of property because it is not state owned. But it is still collective in that corporations are collective by design. Therefore, the end result for the average human “person” is a collectivization of property; the only difference being that the government does not have direct control of that property.

Collective ownership of property is socialism/communism, and if we look at the average worker in the average company, we see this borne out. The moment the average worker enters his or her place of employment, he or she walks into a socialist environment where his or her value is a function of what he or she contributes to the profitability of the company. A wage is paid, but that wage is not the full value of the labor produced by that employee; it is instead a reduced value, the difference between the actual value and the reduced value being that which the corporation takes from the employee in the form of profit. Many companies coerce the prospective employee into signing intellectual rights clauses relinquishing any marketable ideas or inventions the employee might develop while working for the corporation. The individual worker no longer owns the product of his or her own labor, the corporation owns that product. The worker has thus been reduced to a cog in a machine. This is the antithesis of the Lockean philosophy upon which the US was founded.

The result of this is the concentration of wealth (and therefore power) in the hands of an oligarchical few. Since corporations are treated as “persons” under the law, they can now contribute to political campaigns under the full protection of free speech afforded natural persons. With the Citizens United ruling in 2010, corporations can spend all the money they want on advertising during campaigns without having to disclose what they are spending. Thus corporations having far greater influence in governmental matters and the passing of laws than the natural person has. The result has been a continued shift of power into the hands of the few who manage the corporate interests. This has become so prevalent that government, in many ways, now acts as the enforcement arm of corporate interests.

Because money is now thought of as speech, the voice of the natural person or human being is drowned out by the noise of the corporation. This results in the corporate person having a greater influence on the government than real people do. This is not capitalism; it is instead corporatism, a system where corporate interests and government interests are the same. A free society depends on the voice of the people—real people—being heard so as to guide the policies of the government.

References:

Hartmann, Thom (2010). Unequal Protection: How Corporations become “People” and How You Can Fight Back (2nd ed.). San Francisco, CA: Berrett-Koehler Publishers Inc.

Junkerman, J. (Director). Siglo, (Producer). (2002). Power and Terror—Noam Chomsky In Our Times [Motion picture]. Japan:Studio

Stanford Encyclopedia of Philosophy (Fist published 2005, November 9, revised 2010, July 29). Locke’s Political Philosophy. Retrieved July 29, 2012 from http://plato.stanford.edu/entries/locke-political/