Wednesday, November 9, 2011

Do commercial interests have excessive influence on people in modern societies?


Jeffrey Sachs makes it difficult for any libertarians who happen to look at his book, ‘The Price of Civilization’, to consider seriously his claim that powerful corporate interests have excessive influence in America. He claims that libertarians ‘hold that the only ethical value that matters is liberty, meaning the right of each individual to be left alone by others and by the government’.

There are a lot of other ethical values that matter to me – and probably to most others who view themselves as libertarians. In my view, liberty deserves primacy only because it makes it possible for people to live in peace – with minimal coercion of one person or group by another.

Perhaps I am excessively naïve, but it seems to me that anyone who is concerned that people are being manipulated by corporate propaganda might see libertarians as potential allies. Can a case for individuals to be protected from techniques of persuasion that undermine individual sovereignty be argued along similar lines as the case for laws to protect against force and fraud? If it could be, I imagine many libertarians would support additional action to protect individual sovereignty.

Why does Jeff Sachs think that corporate interests have too much influence in America? Dr Sachs, the clinical economist, identifies a range of symptoms. The media is privately owned and funded by advertising revenue. Corporate interests generate propaganda which the media disseminates. Corporate interests largely fund campaigns of candidates for political office. People spend a lot of time watching electronic media.
Sachs writes:
‘The relentless streams of images and media messages that confront us daily are professionally designed to distort our most important decision making processes. We are encouraged to act on fantasy instead of reason’.


Cartoon by Nicholson from “The Australian” newspaper: www.nicholsoncartoons.com.au

Sachs claims that America has become a corporatocracy – a political system in which powerful corporate interests dominate the political agenda. As he sees it:
‘The media, major corporate interests, and politicians now constitute a seamless web of interconnections and power designed to perpetuate itself through the manufacture of illusion’.

So, some readers may ask, does this explain why Americans no longer see much merit in equality of opportunity, don’t think governments should do more to help people in need and don’t think the rich should pay more tax? No! Dr Sachs actually cites evidence that a high proportion of Americans still want more equality of opportunity, favour more help for those in real need who are prepared to help themselves and favour taxing the rich more heavily.

Where does that leave Dr Sach’s diagnosis? I’m not sure. Perhaps the disease has not progressed very far at this stage. Sachs claims that the patient is suffering from a disconnection between shared values and national politics. He sees the disconnection as arising from various aspects of the political system that enhance the power of corporate interests – particularly the military industrial complex, Wall Street, big oil and transport, and health care.

Jeff Sachs has left me as confused as ever about the American political system. He has not persuaded me that America is a corporatocracy. Corporate interests are powerful in America, but so is religion, the teaching profession, environmentalists, etc., etc.

It seems to me to be the main problem in American politics, which is shared by other modern societies, is the trivialization of politics by media that is primarily in the business of selling entertainment. The media can’t be expected to evaluate the claims made by interest groups, but if journalists have access to such evaluations from respected sources they can hold politicians to account for the views they express (or fail to express). Think tanks perform the task of policy evaluation to some extent, but can be too easily dismissed because they are not seen to be above interest group politics. Paradoxically, the government itself is the only organization capable of creating sources of policy advice that are sufficiently above interest group politics to have some hope of commanding widespread respect in the community at large.

Despite the reservations I have about ‘The Price of Civilization’ (in an earlier post about taxation levels as well as here) I want to end this post on a positive note. I strongly endorse Jeff’s view that individuals can benefit themselves and the societies in which they live by making efforts to become more mindful. We will do less harm and may do a lot of good if we become more moderate in our habits, achieve more balance in our lives, improve our knowledge, exercise more compassion, have more regard for the effects of our actions on the environment and future generations, consider how we can promote more constructive political deliberations and be more accepting of diversity as the path to peace.

20 comments:

Lorraine said...

Libertarians are about the only people who believe that corporations are not centers of political power, I suspect mainly because of their reductionist definition of power as "force or fraud." Anyone who's signed a boilerplate contract or all the invasive credit check stuff that is part of any employment application knows that the nature of power is not as simple as libertarians make it out to be. Those libertarians (many of whom are left-libertarians, or "mutualists") who are wising up to the fact that America is a nation in which corporations hold the cards are framing the issue of corporate power not in terms of advertising being fraud (which I think is a weak case anyway), but in terms of lobbying being rent seeking, a fact which is becoming obvious to large portions of the mainstream right and left.

Lorraine said...

It should also be noted that self-identifying as libertarian is quite fashionable in the USA right now, sometimes among people who have no idea what they're talking about.

Winton Bates said...

Hi Lorraine
Welcome back!
Rent seeking plays a big role in Jeff Sach's corporatocracy model.
However, it seemed to me (as a fairly ignorant outsider) that he may exaggerate the power of the industries on his list.

I would like to see a more balanced account of the relative influence of all the groups that seek political influence.

The point in your second comment about conservatives embracing Ayn Rand is very interesting. Some of them might have an epiphany!

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Lorraine said...

OK, now even I'll grant you that advertizing per se contains not even a hint of coercion, but surely you'll grant that there's way too much spam in the blogosphere.

Winton Bates said...

Yes Lorraine, there is way too much spam in the blogosphere. I tend to ignore comments such as those by Marketing Business. Perhaps I should delete them.

Nicky Moir said...

Yes! we live in an era of corporatism. This is worth a look: http://www.youtube.com/watch?v=gIcqb9hHQ3E

Winton Bates said...

Hi Nicky
I'm not sure what it means to get the money out of politics. You can ban all campaign donations from corporations and unions, but that doesn't stop them from running media campaigns to push their own interests.
I think they can probably have much the same influence as now by presenting messages to voters along the lines that industry X is a big employer in this region, so be careful how you cast your vote.

It seems to me that the more important problem in the US may be that the system doesn't impose much party discipline. Voters don't know who to blame for what goes wrong.

Lorraine said...

No, the more important problem in the US is what you pointed out: "I think they can probably have much the same influence as now by presenting messages to voters along the lines that industry X is a big employer in this region, so be careful how you cast your vote." If people need business more than business needs people, then business has the power. And yes, the old saw about the fact that power corrupts definitely applies to the private sector.

Nicky Moir said...

Here is an article from Market Watch which is interesting and related to money in politics:

A nation of suckers
Commentary: Nancy Pelosi, Spencer Bachus and me

By Brett Arends, MarketWatch

SALT LAKE CITY (MarketWatch) — I’m an idiot.

After watching the “60 Minutes” expose of insider-dealing by members of Congress, I’m left wondering (not for the first time, I might add): Why on Earth did I choose journalism as a career? Watch the “60 Minutes” report.

Apparently we might be the only people in public life who aren’t on the take.

Yes, I know, it’s easy to be cynical. People assume we are all “up to it,” and scandals like the one now breaking on Capitol Hill just add to that assumption.

But it’s not true. If any reporter were caught doing the things alleged against some members of Congress, they’d be out. Canned. That afternoon. And they’d be barred from the industry for life. They’d be serving soy lattes for the rest of their days.

Spencer Bachus was shorting stocks during the financial crisis? As a reporter for Dow Jones, I’m not allowed to short stocks or own derivatives at all.

I’m not allowed to own any stock or bond I cover. Indeed, it is very difficult for me to own even an open-ended mutual fund I might write about. I would have loved to invest in Charles de Vaulx’s IVA Worldwide (MFD:IVWAX) fund, or in the Appleseed Fund (MFD:APPLX) run by the Strauss brothers. But these money managers are excellent sources for my articles, so the wisest thing has been, alas, for me to steer clear.

The rules make it very difficult for me to invest at all. When I became a full-time investment writer five years ago, I had to sell all my stocks. That meant selling my Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) and my Amazon.com(NASDAQ:AMZN) Inc. I hate to think how much it’s cost me in lost profits. I have a horrible feeling that if I ever worked it out, I’d discover I have effectively been working for free.

Meanwhile, it turns out many of the people on Capitol Hill are just “oiling the wheel” without any compunction at all.

Sweetheart deals. Insider trading. Loading up in IPOs. It defies belief that Nancy Pelosi and her husband can own a ton of Visa (NYSE:V) stock while she is legislating on credit cards. I can’t own Visa stock while I am writing about credit cards. What is wrong with our country?

They used to joke that politics was “showbusiness for ugly people.” Turns out it’s also the hedge-fund business for

stupid people. Corrupt, greedy and immoral to a degree it’s hard to imagine.

And here we are, you and I, just working for a living. What are we? A nation of suckers, that’s what.

Nicola Moir said...

An interesting article on the 'money in politics' from Market Watch

A nation of suckers
Commentary: Nancy Pelosi, Spencer Bachus and me

By Brett Arends, MarketWatch

SALT LAKE CITY (MarketWatch) — I’m an idiot.

After watching the “60 Minutes” expose of insider-dealing by members of Congress, I’m left wondering (not for the first time, I might add): Why on Earth did I choose journalism as a career? Watch the “60 Minutes” report.

Apparently we might be the only people in public life who aren’t on the take.

Yes, I know, it’s easy to be cynical. People assume we are all “up to it,” and scandals like the one now breaking on Capitol Hill just add to that assumption.

But it’s not true. If any reporter were caught doing the things alleged against some members of Congress, they’d be out. Canned. That afternoon. And they’d be barred from the industry for life. They’d be serving soy lattes for the rest of their days.

Spencer Bachus was shorting stocks during the financial crisis? As a reporter for Dow Jones, I’m not allowed to short stocks or own derivatives at all.

I’m not allowed to own any stock or bond I cover. Indeed, it is very difficult for me to own even an open-ended mutual fund I might write about. I would have loved to invest in Charles de Vaulx’s IVA Worldwide (MFD:IVWAX) fund, or in the Appleseed Fund (MFD:APPLX) run by the Strauss brothers. But these money managers are excellent sources for my articles, so the wisest thing has been, alas, for me to steer clear.

The rules make it very difficult for me to invest at all. When I became a full-time investment writer five years ago, I had to sell all my stocks. That meant selling my Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) and my Amazon.com(NASDAQ:AMZN) Inc. I hate to think how much it’s cost me in lost profits. I have a horrible feeling that if I ever worked it out, I’d discover I have effectively been working for free.

Meanwhile, it turns out many of the people on Capitol Hill are just “oiling the wheel” without any compunction at all.

Sweetheart deals. Insider trading. Loading up in IPOs. It defies belief that Nancy Pelosi and her husband can own a ton of Visa (NYSE:V) stock while she is legislating on credit cards. I can’t own Visa stock while I am writing about credit cards. What is wrong with our country?

They used to joke that politics was “showbusiness for ugly people.” Turns out it’s also the hedge-fund business for

stupid people. Corrupt, greedy and immoral to a degree it’s hard to imagine.

And here we are, you and I, just working for a living. What are we? A nation of suckers, that’s what.

Winton Bates said...

Nicky, I liked the article. It is interesting that journalists are expected to meet higher ethical standards than politicians.

Nicola Moir said...

Thanks Winton. I think a of people are waking up to the systemic corruption in politics.

Also did you know that the Federal Reserve of America is a private company that has never been audited? They have the monopoly on printing the US dollar. I found this out last month and my view of the world has shifted dramatically!

Winton Bates said...

Nicky, I didn't know about the auditing.
If it is true I imagine that the accounts are subject to independent scrutiny in other ways to ensure that they are accurate.

Nicola Moir said...

Winton, I suggest you watch this: http://www.youtube.com/watch?v=bhMacPvc5qc&feature=youtu.be

Lorraine said...

That's what I love about conspiracy theorists. They are to the marketplace of ideas what MLM's are to the marketplace of consumer products. You think you're having a normal conversation with a normal friend, acquaintance or stranger, and when you least expect it, it hits you: Oh, by the way, this is a conversation about Amway, The Federal Reserve, etc.

http://www.leftbusinessobserver.com/Web_of_nonsense.html

Nicola Moir said...

This is very entertaining viewing. http://www.youtube.com/watch?v=8QRltaZFizo

Nicola Moir said...

A good read: http://www.unitedliberty.org/articles/9040-federal-reserve-is-conflicted-and-interested

Nicola Moir said...

An article from The Independent on the expansion of The Goldman Sachs project:

http://www.independent.co.uk/news/business/analysis-and-features/what-price-the-new-democracy-goldman-sachs-conquers-europe-6264091.html

Winton Bates said...

The movement of people from big banks to government and back certainly doesn't look good.
Fortunately, that hasn't happened to the same extent in Australia. People move out of senior positions in Treasuryand the Reserve Bank to take up positions in the finance sector -but there isn't much movement in the other direction.