20 November 2010

Disloyalty to the State

Update below

Money is "free" of the fetters of the state but also now free of the fetters of responsibility to the state (or if you prefer "nation"). The wealthy used to actually think helping their nation be a "great" nation was important and that they were part of what made the nation great--and that the nation actually encouraged and nurtured their greatness; there was a symbiosis in the idea of wealth and success between the individual and/or the company and the country that allowed that success (encouraged/promoted/capitalized). Perhaps that's why folks still cling to that idea that American is exceptional. However, this is not the case with the wealthy any longer--they are out for themselves now more than ever even and in some cases especially if it destroys their companies--sometimes this benefits them personally, immensely. There is no loyalty to the business that makes them wealthy; to the employees that do the work; to the nation that encourages it. And as bloggers have been saying of the Wall Streeters--they believe they are Masters of the Universe--that each one of them, though he/she may simply employ software and technology to make "trades", feels they are undeniably brilliant and deserving and all their success and wealth happened free of intervention from the mass of people that prop up their machinations. "This American Life" did a revealing segment on this not long ago from the show titled "Crybabies".

The below is from an interview with Chomsky at Truthout.

KB: I talked with an older, honest investor recently, a multi-millionaire. He discussed how, as a social norm, his class had relieved itself of any allegiance or loyalty, in contrast to the Eisenhower-era capitalists in the U.S. and East Asian elites today. If this country were to institute higher marginal tax rates - even if well below the 90 percent marginal tax rates under Eisenhower - he said he'd simply shut down what remains of his productive assets in the U.S., put thousands of his workers out of a job, change his citizenship to the UAE, and live there. In fact, after he mentioned Obama's "socialist" tendencies, he was contemplating doing just that. This untethered, transnational mentality that's now predominant is a refutation of Smith and Ricardo's notion that the capitalist class would prefer to support its own country. How does the general population combat this threat, which now extends to physically leaving the U.S. to prevent even income taxes from being levied? You've spoken about worker takeover and management as a solution. What else is in the arsenal of the general population, working through organized labor, the government or other means?

NC: What he’s describing is honest and accurate. In fact, the capitalist class in the '50s was sort of part of a social contract. It was part of the tenor of the times. During the Depression and the War, there was a real radicalization of the population -not just here but all over the world. And the post-War system was designed to reflect that. That's why you get welfare states developing in the '50s - a lot of popular pressure you couldn't escape. Changes have taken place since then and there's actually been a return to an extreme form of predatory capitalism, which means that not only will I close my business or move if I don't like what you do, but something else that's been happening, which is interesting. In the financial institutions, which by now dominate the economic system, the management level repeatedly acts in ways which will destroy their own institutions if it'll increase their benefits, and benefits are not small. You know, you take a look at the revenue of, say, Goldman Sachs - a very high percentage of it just goes to payment of management and bonuses. There was a time traditionally - say, GM in the 1950s - it was trying to develop a consumer base that would be loyal and lasting and they were thinking in terms of an institution that would remain and grow and thrive in the society. By now, a lot of the investment firms - bankers, hedge funds - are perfectly happy to destroy what they're in and come out with huge, tremendous benefits. That's a new stage of capitalism.

Also, remember, I think I posted somewhere not long ago the "answers" from corporate heads to the "doomsayers" of Social Security from 50 years ago--these were wealthy corporate citizens who believed in their role and responsibility to the state and (what makes the state a state) its citizens.

Even our "nationalist" propaganda seems useless in this regard now. Well, as it's only directed at the proles I guess that's not a surprise.

Update--a fantastic example of how business serves itself to the detriment of country and kind.

NC:...Take the period that was moving toward social democracy of some kind - say the '50s and the '60s – that's when the technology that you're using right now was developed. And it was developed at taxpayer expense, but there was no particular thought that the taxpayer would benefit from it. People who would benefit from it were IBM, Microsoft, and so on. The corporate sector wanted the population of the country to pay the costs, take the risks. And it was done totally fraudulently, not so that you could have a computer. People thought they were defending themselves from the Russians or something. But planners understood.

KB: They were building the base for the economy of the future.

NC: They were building the economy of the future, from which they are going to benefit. And maybe incidentally others will, but that’s only incidental. IBM's an interesting case. So IBM was a big industry, with punch cards and everything, but in the '50s, it essentially learned how to shift from punch cards to effectively functioning digital computers at government labs. Actually right here, down below where we’re sitting in Building 20, where a lot of this was going on. And by the early '60s, IBM had gained enough capacity so it could build its own computer. They had the world's fastest computer: the Stretch.

KB: And the U.S. government procured it.

NC: The government had to buy it, because nobody would buy it. It was way out of sight. And procurement is a major technique of state subsidy, a fact that has been well-studied in the professional literature. And this goes on; it's really not until about the '80s - thirty years after all of this - that IBM could really sell PCs and make a lot of money, and Microsoft could spin off and so on. But what's happening now is quite interesting and it's being discussed by the leaders of industry. The Alfred P. Sloan Foundation has done some studies in which they point out that, the way they put it, "what’s good for General Motors is good for the country" isn’t true anymore. Because by now - and IBM is their example - they discuss the fact, or maybe the Wall Street Journal reports the fact, that IBM is not only offshoring where it can to cheaper labor, but is pretty much compelling its domestic workforce to move to India [Project Match]. So we don't want you here, go live like a third-world person in India. We'll pay you less and you do the same thing. So here's a company that was substantially built by the American taxpayer, became super-rich, and their responsibility to the country is not to just offshore jobs, but send their own workers to India. I think about 75 percent of the IBM workforce is overseas.

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