Is America a “Corporatocracy”?

Some time ago, one of my correspondents asked me if I would mind writing on the topics of Capitalism, Communism and “Corporatocracy” in America. Well, that is a big order and not one I am comfortable writing about in a single entry. So in this long-overdue blog, I will try and put my thoughts in order regarding corporatocracy in America. Sallee, this one’s for you…

Corporatocracy or democracy? - Is this a true image of the US?

The concept behind the term corporatocracy is that giant corporations especially those in the United States, have access to massive power and as such can bypass democratic processes to benefit themselves. They are seen (and presumably see themselves) as “too big to fail”, even in the dire economic times we are living through at the moment. Their power is supposedly exercised through industrial scale lobbying, substantial campaign contributions to those seeking elected office, threats to leave particular business locations (ensuring that unemployment follows) unless their requirements are met and promises of future investment in areas of need.

The kind of benefits that accrue to such organisations and the wealthy individuals behind them are supposed in terms of tax breaks, government bailouts, undue influence over domestic and foreign policy and avoidance of legal action against them by individuals, groups and even the state itself.

You don’t have to look far to see examples of what believers see as the outward manifestation of this power; the substantial deregulation of the banking industry making it possible to sell dubious financial products to those unable to repay their debts, the Wall Street bailouts of 2008, the reluctance of the Obama administration to increase the debt burden on American’s wealthy etc. But do these examples demonstrate anything more than the fact that the United States is a liberal democracy empathetic to the needs of capitalism? Lets start by looking at America’s top three most powerful corporations.

The biggest and most powerful American company according to Forbes Fortune 500 isWal-Mart.  In 2010, it generated $15 billion in the U.S. from its grocery business. The company has been subject to criticism by various groups and individuals. Among these are some labour unions, community groups, grassroots organizations, religious organizations, environmental groups and even its own customers. Complains have ranged from issues as diverse as the suppression of  collective bargaining, the poor treatment of domestic and foreign suppliers and poor environmental practices at home and abroad. See: http://en.wikipedia.org/wiki/Criticism_of_Walmart

 

Exxon Mobil oil refinery

The oil giant Exxon Mobile is not as big as Wal-Mart in terms of employment but it is the biggest in terms of profits that topping $40 billion in 2010. ExxonMobil is the largest of the publicly owned oil and gas companies, with daily production in the region of  4 million barrels. In 2010 however, the company paid no tax to the US government thanks to twenty wholly owned subsidiaries domiciled in the Bahamas, Bermuda and the Cayman Islands. http://thinkprogress.org/politics/2010/04/06/90299/exxon-tax/

Chevron Oilfield

Chevron employs approximately 62,000 people worldwide (of which approximately 30,000 are employed in U.S. operations). Daily production in 2010 was 2.763 million net oil-equivalent barrels per day. The company has a worldwide marketing network in 84 countries with approximately 19,550 retail sites.  The company has been accused of illegal waste dumping, and been placed on a list of the “most wanted” corporate human rights violators by Global Exchange.  http://www.globalexchange.org/corporateHRviolators

If as many Americans believe, the country is actually run by its corporations, we should be identify cases where it has avoided prosecution under the law for otherwise illegal activities. Let us see if this is the case…

Wal-Mart is sued two to five times each day somewhere in the United States. These cases involve slip-and-falls, falling merchandise, and false imprisonment/malicious prosecution. They also involve suits brought by employees alleging various kinds of discrimination. Also, the company is sued on a wide range of matters such as pharmacy malpractice, defective products, broken contracts with vendors, and copyright violations. The Wal-Mart Litigation Project http://www.wal-martlitigation.com/99verdic.htm has documented many of these cases and has published a cross-section of “plaintiff-favorable” results against the nation’s largest retailer. These include include examples such as the following:

“Plaintiff, a 54-year-old heart surgeon, tripped over the tongue of a trailer hitch while carrying a bulk package of paper towels in the parking lot of a Sam’s Club (a company wholly owned by Wal-Mart). He suffered a spinal injury, which caused his hands to shake continually. The accident ended his career.

Plaintiff alleged that Sam’s Club should have marked the trailer hitch with a cone.

The jury returned a $5.28 million verdict, but reduced the award by 25 percent for comparative negligence.”

The Exxon Valdez oil spill occurred in Prince William Sound, Alaska, on March 24, 1989, when the oil tanker bound for Long Beach, California, struck Bligh Reef and spilled 260,000 to 750,000 barrels (41,000 to 119,000 m3) of crude oil. It is considered to be one of the most devastating human-caused environmental disasters. In the case of Baker v. Exxon, an Anchorage jury awarded $287 million for actual damages and $5 billion for Punative damages. The punitive damages amount was equal to a single year’s profit by Exxon at that time. Exxon recovered a significant portion of clean-up and legal expenses through insurance claims associated with the grounding of the Exxon Valdez.

In June 2011, a federal judge denied Exxon Mobil Corp.’s request to dismiss a lawsuit by two environmental groups over emissions at the oil giant’s Baytown complex.

Environment Texas and the Sierra Club’s Lone Star chapter say that the company has illegally released more than 10 million pounds of toxic chemicals over the past five years at the complex, which includes two chemical plants and the largest refinery in the nation.

The groups said they filed the suit to enforce the federal Clean Air Act in the absence of government action.

In its motion to dismiss the case, Exxon Mobil argued that “there is no room for private attorney general action in light of the exhaustive regulatory and enforcement actions” of the state and federal government.

The company faces civil penalties of up to $37,500 per day for each violation of the Clean Air Act alleged in the lawsuit. U.S. District Court Judge David Hittner’s ruling allows the case to go to trial. http://fuelfix.com/blog/2011/06/08/federal-court-wont-dismiss-lawsuit-against-exxon-2/

 

In March 2011, Chevron was found guilty of environmental infringement for unlawful dumping in Ecuador and ordered to pay $8.2 billion in compensation. The case was filed by various groups in the Ecuadorian Amazon, and the lawsuit was intended to “stand up for the native citizens whose rights had been trampled”. http://www.renewable-energy-news.info/chevron-ordered-to-pay-for-illegal-dumping-violations-in-ecuador/

 

So, do I believe that America is a corporatocracy? No I don’t, but I do think financial services, extraction, refining, manufacturing and service industries all need appropriate regulation. That companies like Walmart and Tyson should operate on Fair-Trade principles, (see: http://www.fairtradeprinciples.org/) and companies like Exxon Mobile and Chevron should be more environmentally aware put more effort into the research and development of renewable energy sources.

As readers will find out in time, I am a believer in “cock-up” rather than the “conspiracy” but I am concerned at the disproportionate power held by American corporations. Maybe the US should re-invent the Antitrust Laws set up to protect consumers from monopolistic enterprises…

Unregulated industrial grown in the US gave you this. It's not a pretty sight.

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About stevehollier

Steve Hollier is the editor of AZ Magazine, an English language lifestyle magazine based in Baku, Azerbaijan. He began his career working for a firm of stockbrokers in the City of London then went on to attend the University of Essex where he was awarded an MA in Sociology in 1984. After a career in arts and cultural development work, he became a freelance arts consultant, writer and photographer.
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