The History of the Corporate-Commercialist State, Pt3: 'Voodoo Economics'

In the two previous entries in this series of essays, I've spoken about the more distant origins of the utopian thinking and economic theorizing that led to the creation of what can, today, be called an anti-capitalist economy built on a corporate-commercialist system.

In my first essay, I discussed both the origins of the original strain of aristocratic utopian thinking in American culture, in the form of the mythical Jeffersonian democratic ideal. I also described the conflict between this ideal and more pragmatic political theories, leading to its defeat and the full establishment of a capitalist and democratic republican system of economy and government. I also attempted to describe how, lacking the kind of controls Alexander Hamilton and other Federalists had foreseen as necessary, the capitalist economy devoured itself and produced the great trusts during the Gilded Age and Progressive Era. The 'captains of industry' who dominated the trusts were to form their own artistocratic utopian ideal which came to dominate much of American political thinking and is ultimately the direct ancestor of today's neoconservatism.

In my second essay, I discussed the dissolution of the trusts and a reestablishment of a capitalism economic system but how it failed to completely defeat the aristocratic utopian ideals of the first great corporate moguls in their entirety. I also described how the mass media, with all its power to entertain and inform the American people, became essentially an organ of corporate marketing. This marketing power set the stage for a sometimes gradual and sometimes rapid transformation of how business viewed the economy. Instead of the basic capitalist trope of a system in which business met the demands of the public, the mass media suggested that business could create demand for whatever they wished to supply. This led, increasingly, to a theoretical system in which economic demand and public information was shaped by corporate marketing. It also provided the perfect system to prove the old utopian theories about the effective corporate management of society.

As corporate management of society increased, and corporations became more totally dominant in the US economy, this led to the increasing view that held what was good for the corporations was good for the country. This view was already bearing 'fruit' (if you will forgive the pun) during the early years of the Eisenhower administration. When the democratically elected reform president of Honduras nationalized the United Fruit Company (better known today as Dole and Chiquita and a handful of other brand names), not as a prelude to state socialism but rather as a move to free the Honduran economy from foreign control, President Eisenhower gave sanction to a CIA plot to assist the Honduran army in overthrowing the elected government and establishing a military junta. This was hailed as a victory of freedom over Communism, but in actual fact it was a victory of American corporate power over the national prerogatives of a foreign country. It was also a victory of American corporate power over the American government.

As an historical sidenote, while the Honduran junta was politically relatively moderate and did not engage in massive oppression of civil liberties or violations of natural rights (though they did, obviously, suppress political rights in what had been a democratic system of government before the takeover), the new Honduran government would subsequently back a military coup in their neighboring nation of El Salvador. The results of the military takeover of El Salvador and the truly horrific consequences for its people are thus partially the fault of the United States and its policies.

The ability of corporate interests to influence US government policy only grew in the aftermath of this incident. Eventually it became so great that Preisdent Eisenhower's last speech, the famous indictment of the 'military-industrial complex', was specifically aimed at corporate power in government circles. At the time, no one in the GOP and almost no one in the Democratic Party was inclined to listen.

The ties between big business and the Republican Party had always been close (however, not every pro-business Republican believed that business should have its own way unopposed), but in the new 20th Century economy the ties between big business and the Democratic Party slowly began to increase as well. This was partially because Southern conservatives in the Democratic Party slowly shifted, along with Republican conservatives, from a populist to a libertarian economic policy. This was done in the name of fighting Communism with capitalism and of preserving the American economy and way of life. More and more the theme first encountered by Eisenhower was repeated: 'What's good for American business is good for America.'

This found its purest expression in 1976, during the first presidential primary campaign of future president Ronald Reagan. Criticizing public assistance and the social safety net and attacking moderate incumbent President Gerald Ford, Reagan argued that if the government worked to assure the prosperity of American business and the security of the property of the wealthy and the result would be a 'trickle down' effect of prosperity throughout the entire American economy. After his failed challenge to President Ford in the 1976 primary, Reagan would repeat this assertion in his second run for the presidency in 1980.

This time, the voice of traditional Republican fiscal conservatism had an answer. Reagan's most prominent primary opponent, Rep. John Anderson, condemned Reagan's economic policies as 'juvenile.' Another primary opponent, former Texas congressman George Herbert Walker Bush, would deliver the most damning indictment of the primary campaign. What Reagan was talking about, Bush said in no uncertain terms, was nothing more or less than 'voodoo economics.' Though moderate on social issues in the Eisenhower tradition, neither Anderson nor Bush was 'liberal' by any stretch of the word. They were pro-business, fiscally conservative defense hawks with well established Cold Warrior status. Bush, in fact, had briefly been Director of Central Intelligence and had presided over the Ford administration's attempt to clean up the CIA after the agency's scandals had been outed during the tenure of DCI William Colby. The men attacking Ronald Reagan on economic policy were far from 'socialist.' They were capitalist conservatives (GHW Bush, indeed, is an oil millionaire) with a firm understanding of economics.

Ronald Reagan, however, was the man elected president and he was re-elected in 1984 despite John Anderson's attempt to split the Republican vote by running as an independent and attempting to 'talk sense' to the American people. 'Neoconservatism' was en vogue, and 'neoconservatism' was and is nothing less than an attempt to apply the aristocratic utopian principles of the Progessive Era to corporatize society. Though the process had begun long before the Reagan Era, the presidencies of Ronald Reagan, Bill Clinton, and George W. Bush (ironically far more like Reagan than like his father) would see the capitalist economy replaced by the corporate-commercialist state. Regulations were repealed, corporate welfare was enacted, trusts were reestablished, and America moved closer to the dreamed of corporate utopia than it had been since the 1920s.

The Gilded Age and the Progressive Era, with their utopian dreams and their utter disregard for the need for government to regulate corporate activity, led directly to the crash of 1929 and the Great Depression. Likewise, the new search for corporate utopia of the 1980s and 1990s led directly to the recent credit collapse. A capitalist economy requires competition, entrepreneurialism, and economic mobility. The corporate-commercialist state does not allow this, it keeps every facet of society and economy 'in its place' for the greater stability of society and the prosperity and happiness this will allegedly bring.

It is important to recognize, in discussions of economics, health care, and other important issues of the day, that we do not live in a capitalist economy or even the 'mixed economy' so popular with economics professors. We live in a firmly regimented corporate-commercial economy which has far more in common with feudalism than with any other system. The free market advocated by conservatives and libertarians is a myth, total market freedom leads to total market domination by the most powerful corporate interests. Like civil society, the economy requires a certain degree of law and order to function properly. Without it, capitalism devours itself.

We can temporarily better our economic circumstances, for economy is cyclical. There will always be times of hunger and times of glut. This will not ever change. However, by moving back toward a competitive, capitalist economy in which entrepreneurs have the freedom to compete and stockholders maintain some degree of democratic influence over corporate activity we can minimize damage in times of crisis and minimize the risk of true crisis even in times of economic downturn.

The forces which economist theorize as regulating the marketplace are mere functions of natural human economic action. If 'inhuman' forces 'freeze' normal human activity out of the economy, those forces cease to operate properly. The corporate-commercialist state does precisely that.

Welcome to utopia. How do you like it so far?