We all need to understand State Corporatism. It is the system in politics where the State interlocks with big corporations, or companies, in running the nations. It has been about for a hundred and fifty years, or more if you think of the East India Company. It is as least as important as Socialism in world history, but few are aware of it, or even know of its existence. You could say it is world dominant, but unnamed.
For example, Russia since the USSR, has had Putin working with the oligarchs to ensure his and their position. Similarly, China since Mao has moved on from State Socialism to one where companies have a co-operative relationship with the State and more billionaires than any other country in the world. The United States has long had the idiom of “What is good for GM is good for America.” Now Trump says it all – what is good for business is good for America. He fuses business and politics, but we ignore what he represents. In the UK, since Thatcher, it has been dominant and Johnson fits the same model. Most dictatorships involve these cosy relationships between big money-making companies and dictators who benefit from them. If it is such a dominant politico-economic model, it requires more thought.
It’s central commitment is simple. It is if I scratch your back, you will scratch mine. Think Thatcher travelling around to sell arms and Mark Thatcher becoming a pathetic arms dealer in on a contract. It is anti-Socialist. The wages of the workers need to be kept down so that company profits stay strong. Broadly speaking, if the major corporations work with Government and vice versa, they are together able by laws and controls to keep the workers under control and wages down. It has a long history.
Companies became big enough to be influential in the early 20th century in oil, arms, automobiles, food, shipping, retail, farming and other manufacturing. They faced pressure from unions. Socialism and the vote were arriving about the same time, and there was a polarisation between socialism and right-wing corporate state models trying to keep the workers in their place. In the USSR the revolution actually took place. In Germany violence suppressed the workers. In the US they had a Red Scare. In Britain Churchill and others defeated the National Strike. In the 1920s in the States big company barons began to have a world-wide impact and ran US politics until the Wall Street Crash. Elsewhere, Fascism became the violent, militaristic edge of State Corporatism. When it was defeated in 1945 a greater degree of egalitarianism opened up and many countries nationalised industries putting them under the supervision of the state, so that they would act in the national interest and not exploit monopoly power for profit. Joan Robinson and other economists had pointed out the economic inefficiencies of corporate monopolies. Railways, postage, utilities and many other industries were more efficient, because they required national systems of operation. Health, education, welfare, transport and other areas of life became public, for the common good, rather than run by monied interests. All had fought in the War and all should benefit. For several decades this ethos was more dominant.
Yet, gradually, the big corporations crept back into the picture. All kinds of new monopolies appeared. They lined up to provide government with services. Many, especially arms, heavy engineering, transport, finance and other areas found links back into government. Banking had always, through national debt, a link into the State. But the real change came in the West with Reagan and Thatcher. Thatcher sold off, usually cheaply and to her mates, a vast array of national assets worth hundreds of billions. They allowed taxes on the rich to be cut and new areas of corporate profitability to emerge. Reagan spent money hand over fist setting up big corporate profitable contracts, especially in the arms industry, and both deregulated banking and other sectors so that they could reap national and international profits. Off shore tax havens guaranteed the world dominance of vast corporate wealth. Sadly, it took the world several decades, and another banking crisis fuelled by greed, to recognize the problems of this great corporate wealth. The oil and transport corporations denied global warming for decades, pushed militarism into a world-wide destabilising industry, and created a world financial system which is now acutely unstable and unfair.
Of course, these are judgements which the corporate groups would question in a variety of ways, but they represent evidence on a vast scale – whether it is clearing forests in the Amazon, a trillion dollar Pentagon expenditure on a US fighter plane, or allowing minimum wage infringements. Let us look at two further examples. Reagan as President backed a military programme called Star Wars, based around the idea that thousands of incoming nuclear rockets could be taken out by interceptor missiles and blown up. All serious military experts said it was unworkable – shooting a bullet with a bullet was the quick dismissal – but it became a gravy train for a number of big arms companies. In the UK with Coronavirus a number of big contracts for PPE and virus tracking were handed out to companies with links into Government. Those were state corporatist. But they are just the froth. What is actually happening is that Corporations have moved in to run vast areas of public life – prisons, buildings, the military, care, educational provision, railways, airports, utilities, public buildings and more. The contracts are secret. Corruption may abound. Public money is spent profligately. There is little accountability under the law. When companies fail, it is quickly glossed, and really the corporate system is in charge of the State and the politicians are mere puppets. The corporate system through rubbishing reformers, funding their own parties, and controlling political processes run the show. Johnson and Trump, contrary to what they might think of themselves are mainly puppets, keeping the system in place. The State Corporatist System is so fully in place, it thinks it is unshakeable.
This pattern is replicated, with significant variations, around the world, but it is not named, even at the basic level of public discourse, partly because it has learned to hide. It is time now to understand State Corporatism, see how it plays out in various industries, open up the secret areas of the state, and address its injustices and dominance. Hopefully, this short essay sets you on the path.