Sunday night owls. Perlstein: ‘The long roots of corporate irresponsibility’

Sunday night owls. Perlstein: ‘The long roots of corporate irresponsibility’

Night Owls, a themed open thread, appears at Daily Kos seven days a week

Rick Perlstein at The Nation writes—Prophets of Instability. How finance broke the modern corporation:

What are corporations for? In his 1962 book Capitalism and Freedom, Milton Friedman gave a blunt answer: profit. “Few trends could so thoroughly undermine the very foundations of our free society,” he argued, “as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible.” Almost two decades earlier, Karl Polanyi had a different answer. As he wrote in his 1944 book The Great Transformation, allowing profit

to be the sole director of the fate of human beings and their natural environment would result in the demolition of society…. Nature would be reduced to its elements, neighborhoods and landscapes defiled, rivers polluted, military safety jeopardized…. No society could stand the effects of such a system of crude fictions even for the shortest stretch of time unless its human and natural substance as well as its business organization was protected against the ravages of this satanic mill.

So who was right? Polanyi asked us to look all around us for the answer, at the innumerable laws, norms, and institutions that limit markets and at the destruction an economy without such limits caused in the past. His main examples were World War I, the Great Depression, and World War II, a chain of events that happened, he argued, because society had failed to contain the demons and dislocations loosed by 19th century industrialism.

During American capitalism’s postwar golden age, most of the country’s elites agreed that unfettered markets were ruinous. The head of the US Chamber of Commerce in 1946 insisted that “collective bargaining is part of the democratic process. I say recognize this fact not only with our lips but with our hearts.” President Dwight Eisenhower boasted of using “every single force and influence” of government to stabilize the economy and wrote that only the “stupid” sought “to abolish social security, unemployment insurance, and eliminate labor laws and farm programs.” […]

Then things changed. Starting in the ’70s, corporate profits began to fall. A dollar of capital that earned an average of 9 percent annually in 1966 earned 4 percent in 1977. American economic dominance began to fade. In 1971, for the first time since 1888, the United States ran a trade deficit with the rest of the world, at $1.3 billion; by 1980, it had approached $20 billion. Policy-makers decided to give laissez-faire a shot. Near the midpoint of his new book, Transaction Man: The Rise of the Deal and the Decline of the American Dream, Nicholas Lemann tells a story that helps illustrate this transformation.

Robert Reich, the secretary of labor under Bill Clinton—the first Democratic president to occupy the Oval Office in more than a decade—uttered the phrase “corporate responsibility” in a speech and was summoned to the Treasury Department by Robert Rubin, the former investment banker who ruled over the administration’s economic policy, “for an in-person chastisement.” By the ’90s, Friedman had won: Corporations were assigned no responsibility other than to make as much money as possible. With the benefit of hindsight, one might add that perhaps Polanyi had won, too, for in the decades after Reich’s summoning, the economy collapsed, Donald Trump won the White House, and the kinds of calamities that Polanyi warned about began to happen as if on cue.

Lemann has been one of our wisest, clearest-thinking, and most learned commentators on American society since he began his journalism career at Washington Monthly in the 1970s. His books (The Promised LandThe Big TestRedemption) all tackle moments of sweeping social transformation, offering compelling studies of the interrelation of ideas and institutions grounded in the experience of ordinary people. Transaction Man, which tracks how the United States went from a largely Polanyian society to one defined by ideas like Friedman’s, is his best—and most sweeping—yet. […]

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Let’s try this, NYT: BREAKING: Republicans tried to use a crisis to loot America again and Democrats stopped them. https://t.co/XwgW5lW519

— emptywheel (@emptywheel) March 23, 2020

BLAST FROM THE PAST

At Daily Kos on this date in 2003—Warm welcomes. Or maybe not:

This is a sobering piece for all those “war reporters” who have breathlessly reported on the gleeful welcome US toops received in southern Iraq.

They were unforgettable images: Residents of this southern Iraqi town openly welcoming coalition forces. They danced in the streets as a picture of Saddam Hussein was torn down.

That was yesterday.

Traveling unescorted into Safwan today, I got a far different picture. Rather than affection and appreciation, I saw a lot of hostility toward the coalition forces, the United States and President Bush.

[…]

[They asked:] Why are you here in this country? Are you trying to take over? Are you going to take our country forever? Are the Israelis coming next? Are you here to steal our oil? When are you going to get out?

And these are the people th[at] REALLY hate Saddam. So much for flowers and waving US flags. This isn’t the liberation of Kuwait City. This is an invasion. We are the invaders. Rarely do people welcome invaders with open arms.

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