Free Enterprise Is Dead, Long Live Free Enterprise!
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The growing mountain of scandals in the corporate world does not mean the death of corporate power in America. But they may be a mortal wound for the free market ideology that has been so dominant over the past twenty years.
For many years now we have been inundated with slick messages claiming that markets function best when government regulation is minimal or nonexistent. We have been told that if government regulatory agencies just get out of the way and let markets rule, we can trust corporations to do what is in the best interest of everyone.
As it turns out, corporations operating in a deregulated environment do what is in the best interest of no one except the top corporate officials: government agencies and investors get lied to, pension funds lose billions, companies go bankrupt, thousands of workers lose their jobs, shareholders lose their investments, and faith in the system is shaken.
Now we citizens must decide which definition of "free enterprise" will prevail. Will it be "the freedom of large corporations to go anywhere and do anything to people and planet" or will it be "the freedom of everyone to be enterprising"?
The first definition is systematically crushing the second: family farms are being squeezed out of existence by big agribusiness, mom-and-pop stores are being knocked out by Wal-Mart, independent bookstores are being exterminated by Amazon.com and Borders. The second definition ("the freedom of everyone to be enterprising") is the version that 200 years ago fueled the American Revolution against colonial England. Family farmers, artisans, and just plain folks sacrificed everything for liberty and the idea of citizen self-rule. Now nothing seems sacred except the almighty dollar, and even that isn't so mighty lately. To redefine free enterprise in a democratic direction, we need to establish the separation of corporations and the state.
Most people understand separation of church and state. Centuries of abuses by the Holy Roman Empire drove home to the founders of this nation the principle that no single institution should control government; the government should be the property of all the people. That is why our Constitution starts with the words: "We the people." Sovereignty (ultimate political authority) in a democracy is supposed to reside in the people, not in a subset of the society or one institution of the society.
But now a single institution -- the large, transnational corporation -- has taken over our government, and we, the citizens, need to take it back before the current crisis matures into a full-scale bankrupting of our nation.
Empowerment largely consists of knowing your options. We have choices we must make as a people. Should impersonal transnational money interests be given priority over locally rooted, family-owned enterprise? Should we invest capital in ways that destroy nature or in ways that preserve our natural heritage for future generations?
These questions are easy to answer, but the follow-up work is difficult. If we are going to take our government back from the moneyed interests that have seized control of it, then we need to carry out several major areas of structural reform.
We need deep and broad campaign finance reform. Only by building a solid wall between moneyed interests and our public officials (who are supposed to be working for we the people) will stop the tide of legislation that favors wealthy minority interests over those of the broad majority.
We need the other half of welfare reform: corporate welfare reform. Whether it is oil depletion allowances, selling public resources to corporations at below market prices, creating roads in the national forests so logging companies can get to the people's trees better, subsidizing agribusiness companies so they can better squash family farmers here and abroad, or paying corporations to take our jobs overseas, all of this corporate feeding at the public trough must end.
And we need to stop the revolving door between high-level government jobs and high-level corporate jobs. The typical scenario is that a corporate executive does a stint in government, learning where the money is and building up a fat rolodex, then switches back to the private sector and trades off the knowledge gained while on the public payroll.
We know that these are major contributing factors to the mess we are in. Now we need to do something serious to fix them. Powerlessness corrupts, and absolute powerlessness corrupts absolutely.
Kevin Danaher and Jason Mark work for the international human rights organization Global Exchange and are coauthors of 'Insurrection: Citizen Challenges to Corporate Power' (Routledge, 2003).