Mainstream Media And Distortions Of Capitalism
February 1st, 2012 - C. P.
It was a sunny Sunday afternoon when I saw Ali Velshi grace my television screen with a caption that read: Capitalism On Trial; What Do Banks Do For You?. Seeing those two phrases together made my blood boil. From the Occupy protests to modern Western socialism, all of it seems to be fueled by the American media's attempts to distort the original and fundamental principles of capitalism. The segment on CNN was largely about the big bank bailouts of 2009, which only added to the high temperatures that were causing my blood to rumble and gush through my veins with violent ferocity. These arguments involving capitalism and bailouts have been common ones since 2009. The New York Times, MSNBC, and even Fox News have blended bailouts, corporate influence, and capitalism into the same argument. This not only acts as evidence that people are confused and ignorant about what capitalism really is, it proves that mainstream media has deliberately been feeding such misconceptions. In Michael Moore's 2009 film, Capitalism: A Love Story, the filmmaker suggests that bailouts and corporate influence in Washington are direct results of capitalism. He could not have been more wrong. Capitalism is not the cause of big bailouts, meltdowns, and corporate welfare – stupidity and corruption are.
It is true that mortgage rates and low interest lending were responsible for the eventual economic meltdown. Such mass stupidity, however, cannot just fall on the shoulders of private banks. In a 2009 editorial for Forbes Magazine, Steve Forbes stated, “The housing bubble could never have grown to the size it did had the Federal Reserve not printed so much money and kept interest rates artificially low for so long.” Yes, banks were driven by profit, market shares, and capital, but within a true capitalist society, they would have all paid the price for their stupidity. In fact, they almost did until the big benevolent government stepped in. The stupidity and ignorance of the consumers, and big banks who sold dreams with dangerously low rates to anyone with a pulse, all came close to financial ruin as a result of their careless practices. The homeowners and the big banks that stretched themselves beyond their own means were about to learn a valuable, groundbreaking, and truly devastating lesson that would have resonated with generations to come. But, instead, the government intervened with a massive taxpayer funded bailout that saved the entire system and the big banks from their own mistakes.
Corporate welfare and rabid consumerism are not capitalism. Consumerism is a condition that can exist in any economic system. Corporate welfare and big bank bailouts are not condoned or encouraged by true capitalists. Of course, the rich executives had to do their part to save their corporations and their legacies from ruin by resorting to the same tactic that everyone else resorts to in times of impending doom: begging for help. The CEO's and bankers that nearly ruined themselves and the entire economy became classic welfare cases because the U.S. government caved in. This worked well, largely because the career politicians in Washington who depend on re-election for job security decided that it would not be in their best interest to let the financial framework of America collapse. They were blinded by the idea of mass bankruptcies, plummeting stock prices (many of which they probably owned), chaos, empty grocery store shelves, financial ruin, riots, and keeping the promises they made to their campaign donors (mostly corporations). This doomsday scenario that was played up by financial “experts” and economists was the major driving force behind TARP.
"Human beings, who are almost unique in having the ability to learn from the experience of others, are also remarkable for their apparent disinclination to do so," said Douglas Adams, author of A Hitchhiker's Guide To The Galaxy. His words hit the nail, dead on.
When you play with fire, you get burned. If your mother stops you before you have a chance to feel the pain and deal with the blisters, you fail to learn anything and you will probably play with fire again until you finally feel the pain for yourself. The fact of the matter is that the government has only encouraged future failure by offering a helping hand to the fallen. Further facts prove that the massive financial bailout never stopped hundreds and thousands of foreclosures – foreclosures that were a result of bad judgement on both sides: the banks and the families. However, while the big banks received their bailouts and paid their executives record bonuses, thousands of American families were still losing their homes. So, only the families ended up paying the price for their mistakes. This is the root of people's anger towards what they think is capitalism.
Again, taxpayer bailouts do not represent capitalism. The simplest definition of capitalism takes us back to the history of the word itself. Along with socialism and communism, capitalism was coined in the 19th Century during the Industrial Revolution. The word comes from capital and the simplest definition for capitalism is: an economic system characterized by the private ownership of capital goods. Beneath the surface of this word lies several independent theories and a complex layer of philosophical definitions, one of which suggests that capitalism is driven by greed and that the definition of the term implies the selfish pursuit of endless wealth. Some have taken the word to mean: the endless accumulation of wealth as an end in itself. This theory is where the distortions lie and where the U.S. media has gotten it completely wrong.
Even if capitalism is about the endless accumulation of wealth as an ultimate purpose, so what? Had the major banks failed, their pursuit of endless wealth would have imploded and their CEOs would have been broke and jobless. Instead, the government stepped in. Their wealth was restored not by their own ingenuity but by the taxpayers. In a capitalist system, failure is not rewarded. In capitalism, people who fall must pick themselves back up. This so-called endless accumulation of wealth is supposed to come from profit, not bailouts. Therefore, associating bailouts with capitalism is completely inaccurate and it acts as a complete and deliberate distortion.
Of course, capitalism enables greed and monopolies just as much as it enables and encourages individual wealth and prosperity. However, capitalism does not interfere with the democratic process in the ways that media and ideological socialists would have us believe. The word that media organizations should be using to describe this unhealthy fusion of corporations and politics is: corporatism.
It was in the early 19th Century that the U.S. Supreme Court recognized corporations as individuals with individual rights and individual privileges. It's called corporate personhood and it was instilled by the government. How this personhood and recognition of corporations as natural persons came about is questionable. We can only wonder how such a flawed set of laws came into existence. It was through these laws that corporations became private, individual entities with the ability to own capital goods, manage production, profit and pay taxes just like individuals. Capitalism differs from communism and socialism in the sense that it allows individuals to own, sell and produce goods, rather than leaving the responsibility in the hands of massive bureaucratic governments. However, under corporatism, we see such goods and markets being controlled by massive bureaucratic corporations, often through political influence. The difference now is that the actual individuals who manage these corporations have little, if any, accountability under the law and they are driven by the legally binding pursuit of profit and growth. Furthermore, to truly define corporatism, these corporations have acquired significant wealth from their monopolies, which they use to influence politicians and governments to further protect and contract their growth. Corporate influence is also partially responsible for the destructive system of fractional reserve banking, which allows corporate banks to lend out money that they do not have.
Corporate personhood takes away a lot of red tape, expenditures, legalities, and taxes that would otherwise be a factor for corporations made up of thousands of employees. It allows corporations to transact with customers and governments more efficiently, in the same manner as a regular business or individual – even though they are not actually individuals. Corporate personhood undermines individualism and individual prosperity by encouraging collectivism in the very same way that communism does. Corporations can and should exist, but their capabilities would be limited without corporate personhood, creating a more logical and fair playing field. The difference between a small business and a corporation is their capabilities to compete. The capabilities and growth of small businesses should not be limited by government, but by competition. Through government regulations that increase red tape, licensing costs, and legal requirements, already rich and established corporations become more capable of starting new enterprises than small companies and individuals. In terms of political donations, corporations are allowed to contribute on top of what their CEOs might contribute personally, because they are considered individuals. Corporations are also sued and taken to court as individual entities. All of these rules illogically and unfairly strengthen a corporation's capabilities against smaller competitors.
Eliminating corporate personhood would not end corporatism in North America, nor would ending corporate personhood eliminate the existence of corporations. But, if corporations did not exist, the free market would be extraordinarily diverse. Rather than one corporation owning 70% of a market, we could see hundreds, or maybe thousands, of individual small businesses and sole proprietors controlling shares of several markets.
As you can see, capitalism is not corporatism. In a hypothetical system of capitalism without corporations, we would see a completely different version of the free market. We would see more wealth gained through individual achievement, but we may also see a more diverse but less efficient level of consumerism and supply to meet demand. To some, such a market might not be so bad. To those who prefer efficiency over diversity, such a market might not be so favorable. We would probably still see political bribery and corruption as well, but we would see less artificially inflated monopolies. Although corporations have their benefits, especially for avid consumers, there are laws and regulations in place today that are actually designed and written to protect corporate monopolies and to stifle small competitors. Although such laws were likely influenced by corporations, at the end of the day we can only hold our elected representatives accountable for the bills they pass.
You don't often see massive media corporations like Time-Warner addressing the problems of corporatism. Instead, they feed the public's ignorance about capitalism. Addressing corporatism would be like eating their own legs. Massive corporations like Time-Warner would rather not shed light on their own abilities to sue their competitors into submission, lobby Washington bureaucrats to pass laws that protect their profits, and to act more like bureaucratic communists than like truly competitive capitalists.
Communism and socialism are forms of collectivism. Corporations are groups of individuals that are identifying and acting as a single unit. A corporation is a prime example of collectivism. Therefore, it is fair to say that corporations are, in fact, communist-style entities existing within, and taking advantage of, a capitalist system. How this came about is through government intervention and legislation. Logically, corporations should not be considered individual entities under the law. In terms of efficiency and economic growth, perhaps they should. Regardless, the problem of bailouts, economic inequality, corporate influence, and general economic chaos always comes down to erroneous government decisions and intervention, not capitalism. Steve Forbes also stated in 2009 that the Great Depression and the inflation of the 1970's “were both the result of catastrophic government mistakes”.
If media organizations are corporations benefiting from capitalism, some would ask why they would be deliberately spreading misconceptions about capitalism. The evidence is clear that they are not doing it accidentally. Interviews with intellectuals, and experts with PHDs, makes it obvious that these people on CNN and MSNBC are not ignorant, but rather ideological. It's not as hard to understand as some would think why Time-Warner, Viacom, Microsoft, and NBC Universal would care to propagate misconceptions about a system that they use to earn profit. Essentially, very few multi-billionaire corporate tycoons are actually genuine capitalists. Warren Buffett, Bill Gates, Rupert Murdoch and George Soros are perfect examples of tyrannical megalomaniacs who have gained from capitalism and would rather keep it to themselves and to the elite “intellectuals”, rather than have it be utilized or understood by the everyday layman. What we know as capitalism has been distorted into something that average people are supposed to accept as evil. The Buffets and Soros' of the world don't want you to start your own business, be independent, be competitive, or be prosperous outside of their control. Why start your own media empire when you can just join theirs? We are continuously evolving into a society in which individuals are told that they cannot prosper without being dependent on some sort of higher power – in this case it's either governments or corporations.
Capitalism is being edged out by corporations and governments that do not want the average person to prosper or have control. Instead, the massive corporations of the world would rather act as their own empirical governments; hiring, firing, and determining the wealth of individuals within the markets that they control. The men and women responsible for this destruction and distortion of capitalism will continue to prosper and amass wealth by influencing politicians, viewers, readers, and markets while the average citizen grows more ignorant, wary, and incapable of accepting true capitalism. We will continue to be told that capitalism is destructive, while megalomaniac billionaires and their corporations continue to capitalize and push small competitors out of their markets. Just like dictatorships, these corporations are committed to keeping their markets exclusive, just as tyrannical governments are committed to maintaining their control over citizens.
Corporatism is undeniable. What we are seeing and experiencing is not capitalism. The right to ownership has slipped from the hands of individuals and into the hands of tyrants. Corporatism is similar to socialism and communism in this aspect. You are encouraged to buy their goods and services, but discouraged from producing your own. If you do produce your own, you will be bombarded by regulations, legal obstacles, and costs that only massive corporations are capable of affording. If you somehow succeed, you may face a hostile takeover. Start your own television network or grow your own food and be faced with licensing, registrations, rules, regulations, and permits that would make the entire endeavor worthless. Anything that you can do yourself should be left to the corporations. They can do it better. Individual production and ownership and the true tenets of capitalism are no more.
Free internet is the next big threat to corporatism. Thus, we see lobbyists attempting to pass legislation that would expand their powers and profits and take away the individual's right to share, create, and distribute. Within a decade we may see more internet regulations, including new and more expensive licensing and registration requirements for dot com owners. True freedom cannot co-exist with what has become a modern form of tyranny. Unlike capitalism, corporatism is an elitist form of collectivism that reserves individual ownership for the select few. Since the very beginning of civilization, individual freedom has been the bane of every fascist's existence and it has continuously been undermined and destroyed. The oligarchs at the top have redefined words, spread misinformation, and used wealth to influence and strengthen their power. Today that trend continues because we let it.