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March 20, 2012

The necessity and possibility of corporate reform: Part 1. Introduction

By Gary Brumback

America is headed to "ruination," being driven there by corrupt corporations in the driver's seat and corrupt government in the back seat. Reforming the way government governs could help reverse course, but government is intransigent. The necessity and possibility of targeting corporate America and its allies for reform is the subject of this and a later, follow-up article.

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In my book The Devil's Marriage: Break Up the Corpocracy or Leave Democracy in the Lurch, in various articles such as those in OpEdNews.com, and on my website www.uschamberofdemocracy.com I have presented numerous proposals for reforming all three branches of our government that have been corrupted by corporate America. Except on the subject of creating a socially responsible capitalism I primarily excluded in those writings proposals that focus on reforming corrupted corporations.

Lately I have turned more of my attention to the necessity and possibility of corporate reform. It's necessary because corporate America is in the front seat, government in the back seat driving America's decline. It's possible because corporate reform may just be more feasible than government reform. We all know how futile the latter has been over the years. Furthermore, while corporate America may be too obtuse or complacent to realize it, their own reform may be good for them in the long run. As an organizational psychologist for nearly half a century I know how inefficient the corporate organizational structure is and how poorly corporations are run. Most of them would probably have a very tough going if they lost government handouts and hands-off corporate wrongdoing. A corporation that was properly organized and well run with the proper standards of performance and self accountability ought to be able to make up for its ill begotten profits.       

Reformers, therefore, should seriously consider shifting much of their attention and resources away from government reform and to corporate reform. The purpose of this introductory article is to lay the groundwork for that shift. The second article will suggest some reform strategies. Both articles concentrate on the left-most element of this fundamental equation:

             Corrupt Corporations   & Their Allies + Corrupt Government = RuiNation

But let's first start with the outcome side and briefly walk through the equation backwards.   "RuiNation" is a condition of state, the opposite of a peaceful and prosperous nation that puts the interests of the general welfare of Americans ahead of the special interests of the corpocracy, the Devil's marriage between powerful, corrupt corporations and their patron, our obsequious, corrupt government. America is not a peaceful nation. It has and continues to be the most warring nation on the globe, and America's general welfare has deteriorated to the point that among industrialized nations America has the worse socioeconomic conditions.

America has not yet reached the ultimate stage of ruination in which she simply ceases to exist as a nation, as happened to the Indian nation when obliterated by the new America's settlers over two centuries ago. But America seems headed in that direction. There is absolutely no sign that America has reversed course toward becoming a peaceful, law abiding, egalitarian, ecologically protective, and prosperous nation.   

Taken together the two elements on the left side constitute the corpocracy. It alone is directly responsible for America's current condition. Common to the two is mutual corruption, a process that leads to wrongdoing or behavior that violates legal or ethical norms and that causes psychological, financial, or physical harm ranging from minor to the irreversible like death. All wrongdoing is unethical but some of it is legal, not illegal. Our government makes much of corporate wrongdoing legal by one means or another.

It is important to point out that neither government is, nor corporations are, nor are people in them inherently corrupt. American government starts with a piece of paper, the U.S. Constitution. Corporations also start with a piece of paper, a corporate charter. Human beings start at birth being basically helpless and benign. What lead to corrupt behavior over time in any given situation are the situation itself and the vulnerable characteristics of the people in that situation. When a given situation pressures (as do, e.g., quarterly earnings reports) or tempts (with, e.g., a stratospheric bonus) a person to do wrong and the person is in a seductive position of power (e.g., a CEO), is greedy, is excessively ambitious, is morally weak, and/or is a strident, unreasonable ideologue (e.g., a fervent believer of free-market theory or of American imperialism) wrongdoing will follow as surely as night does day. Needless to say, none of us is a saint; we are all fallible people living in pressuring and tempting situations. But few of us are members of the power elite.  

Neither, obviously is corruption inherently permanent once a government, a corporation, and people in them become corrupt. If corruption were irreversible reform proposals and efforts would be useless. If corruption were irreversible America would be headed inexorably toward that final stage.

Corporate America: An overview

Big government is undeniably too big yet it is dwarfed by the number of corporations and their people and is totally overpowered by corporate America (if corporate reform were a success there would be no excuse for a bloated and massive government). Corporate America is very heterogeneous spread as it is across many different manufacturing and service industries yet has a common goal of advancing itself regardless of the means. There are about 17,000 corporations in corporate America if we arbitrarily define any of its corporate members as having over 500 employees. Since size, corruption and abusive power usually go together we ought to divide corporations or their industries into three categories of size, small, medium, and large as modified by the scale of harm done and assign reform priorities accordingly.

As big and powerful as it is overall Corporate America nevertheless accounts for only about 20% of all businesses in America. The rest is referred to as small business, but it is not small in the size of its total workforce. Small business employs far more people than do corporations. Small business, if it would unite into a coordinated counterforce could be a powerful opponent of the entire corpocracy.

Corporate America's allies: An overview

Not counting its "marriage partner," that is, government, corporate America has many allies it can depend on to further its interests either by supporting and/or accepting them: the touts and shills; the cultists; NGOs; small business; compromised professions and sciences; the bystanders; and even foreign enemies. With the possible exception of the bystanders, an ally benefits directly or indirectly from its explicit or tacit alliance with corporate America. An ally that is explicit and very active in its support of corporate America ought to be considered accomplices in contrast to tacit and passive allies. Any corporate reform strategy must include corporate America's allies or risk being blindsided by them.

Touts and Shills. They are a motley lot of accomplices and the difference between a tout and a shill isn't always clear cut. Touts (that's what Winston Churchill called lobbyists) are hired and paid to swarm inside government and lobby it for their clients. Anyone, any organization, any association can be a shill. Even politicians or judges can be shills. As a matter of fact, if you want to call government the biggest shill I won't disagree with you.

A shill's focus is usually not as laser beamed as a tout's. Shills generally offer paeans to the corpocracy and its conservative, free-market ideological underpinnings. Think of shrill shills like ideologically blinded, ranting and raving radio talk show hosts as an extreme example. Touts, on the other hand, concentrate on getting specific favors for particular corporate members of the corpocracy, be they a certain corporation or a particular industry.

Consider the U.S. Chamber of Commerce, an extremely influential shill and tout. As I wrote in the December 13, 2011 issue of OpEdNews.com the USCC was instrumental in furthering the imminent US Supreme Court Justice Lewis F. Powell's "battle" plan to revive a dormant corporate America. The USCC has been called by the authors of a Washington Post story the "goliath of the lobbying world," making Big Pharma look like a piker.

Shills that I'll lump together include: talking-head pundits and the rabble rousers shouting into a mike; "Erudites" squirreled away in think tanks authoring corporate gospel; and "front" groups, whose purpose is to mask corporate intent and consequences and call them what they are not. Then there are in varying shades of shill the business and law schools that mint the new recruits for the managerial and executive ranks throughout corporate America and supply it with lawyers paid well to argue the legality of any corporate action no matter how harmful.  

The cultists. One of the most insidious cults is the "cult of growth," preferably fast growth, every quarter. The cultists in it generally aren't shrill shills but their views on and promotion of unbridled growth sometimes go to the extreme and the actions sometimes condoned for achieving growth go to the extreme. In this cult are mostly mainstream economists, management gurus, and speculative investors and their brokers. There is even a politically activist organization called the "Club of Growth" that is for bridled taxes and unbridled growth." This cult helps fuel corporate America's wrongdoing by reinforcing speculative investing, globalization, environmental exploitation and what author Roger Terry in his book calls a kind of "economic insanity."  

Another cult is the conservatives who mostly occupy the right wing of the once proud Republican Party that called Abraham Lincoln its first U.S. President. This Party has become, says the Nobel laureate in economics, Paul Krugman, a strident group of malcontents "acting out of pure spite like a "bratty 13-year-old." They spew provocative and deceitful exhortations and slogans (e.g., "let's reload," "don't tread on me," "freedom works") and are against government solutions, particularly social welfare (so miserly it is dwarfed by corporate welfare).

"Anticorpocracy" NGOs. What you see is not necessarily what you get when it comes to the realm of NGOs that purport to be opposed to one or more facets of the corpocracy. In the February 23, 2012 issue of OpEdNews.com I wrote about my frustrating experience in trying to get what I call "two-fisted democracy power" organized and unleashed, and I included profiles of two financially well-endowed and large NGOs that appear to depend more for their existence on the corpocracy's continuation than on ending it and reclaiming democracy. I had been forewarned about this and so I expect I will encounter many more compromised NGOs as I continue contacting them. If they refuse to unite or at least coordinate their separate government reform initiatives then putting more emphasis on corporate reform becomes paramount.

Small business. Small business is no longer the backbone of our economy. Its backbone has been crushed. It has become both a victim of and to some extent a compromised ally of corporate America.   

Compromised professions and sciences. Probably the most shameful of this diverse lot are people of the cloth, that is, the religious profession. It is full of "pulpiteers" who mouth scripture and generalities about sin for fear of alienating those in the pews who put profit and power before honor when not in a house of worship. Next would have to be the legal profession, especially its corporate lawyers who specialize, to take an excerpt from the title of Ralph Nader and Wesley Smith's book, in the "perversion of justice." Next might be the mainstream journalism profession that has been compromised by the media magnates. I would also not leave out most of the other professions as well as the sciences because they have been compromised in various ways such as receiving government and corporate funding. Society tends to place far too much unguarded trust in the performance of professions and sciences because of their education, training, and standards of performance.

The bystanders. This passive and amorphous lot usually known as the silent majority is the most populous of all the allies. It includes fatalistic people, cowed and fearful people; bamboozled and distracted people; and exhausted people too busy trying to eke out a living.         

Foreign enemies. This is not a mistaken inclusion here. Sociology professor Charles Derber contends in his book, Regime Change begins at Home that "---today's regime (aka today's corpocracy) "can survive only by practicing a foreign policy of bad faith that [he calls] "marry-your-enemy.'" Carrying out this policy fattens the defense industry, including beefing up its sale of arms (the U.S. is the world's top arms seller); opens up, protects, and expands corporations' foreign markets and exploitation of natural resources (oil and minerals) and cheap labor; keeps politicians in office; and distracts the American public from growing socioeconomic deterioration at home

Vetting corporate America and its allies

Vetting over 17,000 corporations and countless accomplices in search of the scoundrels and saints would be as overwhelming as it would be silly. Relying on a random sampling of them would net a catch of scoundrels, but the overall goal of ending the corpocracy and reclaiming democracy obviously must not be left to chance. The best approach would be a coordinated search among the many existing watchdog groups such as the ones on this list:

www.consumerwatchdog.org www.corporatecrimereporter .com   www.corpwatch.org  

www.countercorp.org www.globalwitness.org www.iwatchnews.org www.multinationalmonitor .org www.opensecrets.org www.polarisinstitute.org www.public.org www.sourcewatch.org www.fixtheuschamber.org

Here is a suggested plan they could follow for vetting corporate America and its allies:

1. Set a threshold of wrongdoing. There are so many ethical values and so many harmful ways to breech them that the severity of the harm done needs to be graded, starting with determining whether there is any reasonable evidence that harm has occurred in the first place. For each of the three dimensions of harm, psychological, physical, and economical there needs to be a consensus on a threshold of harm that excludes immaterial consequences. Determining the thresholds would be very easy to do but necessary. There is plenty enough reform work to do without getting bogged down in trivia.  

2. Name the obvious first. Some industries, their corporations, and their allies do not need to be vetted. They are the most rotten apples in the barrel. Offhand, I can think of six. Merchants of death, such as corporations in the "defense" industry would be first. Second would be the nuclear industry and its corporations. Third would be the agribusiness industry because of its poisoning of our food and drinking water. The fourth would be the financial "disservices" industry and its gangsters. The fifth would be the pharmaceutical industry where health often takes a backseat to wealth. The sixth would be certain allies like the trade lobbies (e.g., for the defense and pharmaceutical industries) and the USCC.

3. Vet the rest. Doing this will take some time so this is a good place to mention Jamie Court's "corporateer quotient" that he wrote about in his book, Corporateering and who is president of Consumer Watchdog. The quotient is derived from answers to 18 questions (e.g., "what percentage of total expenditures is spent on political contributions and trade lobbying"). His questionnaire or some adaptation of it could be used in the vetting process while keeping in mind the complication, as Court does, that not many of the answers are publicly available even though "none of the questions are trade secrets."

4. Don't overlook any saints. There surely must be a few honorable exceptions among corpocracy America and its allies who could conceivably serve as inspiring exemplars. The search might turn out embarrassing though. I remember for example the pundits who were featured in a business magazine after having extolled Enron very shortly before that corporation imploded from its own misdeeds. An exemplary corporation therefore ought to be one that has passed rigorous screening.

Once the vetting is done, the next step is to plan a strategic approach to reforming the scoundrels. This matter is the subject of the second article.



Authors Website: http://www.911rescueamerica.com

Authors Bio:

Retired organizational psychologist.


Author of "911!", The Devil's Marriage: Break Up the Corpocracy or Leave Democracy in the Lur ch; America's Oldest Professions: Warring and Spying; and Corporate Reckoning Ahead.



I may be aged but I am still an indefatigable foe of America's power elite who are ruining our nation and the world. If they wrongdoing and evildoing are not stopped there will be no humanity later this century. My newest book, "911!" explains why America needs rescued from the death grip of the power elite and proposes a detail plan for rescuing America and creating a new People's America.

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