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Keep an eye on the 'corporatocracy'

August 24, 2008|By ALLAN POWELL

In a highly charged, controversial book, "Confessions of an Economic Hit Man," author John Perkins alleges that corporate power and greed is weakening the very fabric of our republic and taking us down the road toward empire.

Right or wrong, Perkins has sounded an alarm worthy of our attention.

Perkins, an insider to this corporate network, asserts that a new surge of "corporatocracy" is at work because of deregulation. National and international consulting and construction giants are dominant forces in developing countries. Corporate tentacles are reaching all points of the globe-laying the groundwork for an American empire.

One might suppose that Perkins knows whereof he speaks. He was an economic planner, consultant and designer for massive construction projects in Panama, Columbia, Ecuador, Saudi Arabia, Iran and Indonesia in competition with the likes of Bechtel and Halliburton.

In spite of his continuous successes, Perkins avers that he was increasingly plagued with guilt because these developing countries were strapped with backbreaking debt when they borrowed more and more and became a dependent of the United States. He compared this arrangement with the old system of mercantilism used by colonial empires to become rich by exploiting colonies.

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This expansive and intrusive outreach is a notable feature of the neo-conservative advisors who have influenced the Bush era. They write about the "Pax Americana" (American Peace) as they attempt to spread democracy by force. Those familiar with ancient history will recognize the similarity to the "Pax Romana" (Roman Peace), which signaled the transition from republic to empire. Perkins sees the road to empire as the path to decline and death. As kids say, "this is heavy stuff."

There are capabilities inherent in the corporate structure that make it possible to dwarf the earlier, simpler business organizations. The first feature of empowerment is limited liability. This legal arrangement makes individual stockholders secure from personal suits but not the corporation. This is an inducement for investors to buy stock.

The second improvement is the ability to raise "unlimited" capital, which is required for the enormous engineering projects planned for these developing countries. A third very useful endowment is that of "eternal life" - which is to say existence as long as the charter is viable.

When it is remembered that a chartered corporation is treated as a legal person it becomes obvious that few, if any, actual living people are the beneficiary of so many useful social assets as the foregoing list of capabilities. New life and vitality were added to efficiency and flexibility to make the corporation the ready agency for capitalist growth and productivity.

The corporation, in conjunction with government agencies such as the World Bank and the International Monetary fund supplemented by foreign aid grants, does set the stage for the possibility of a "corporatocracy." By then, including the sale of armaments, we arrive at the "military industrial complex" feared by Dwight D. Eisenhower and now considered a reality by John Perkins.

It is unclear how much anxiety or fear exists in the popular fancy in the United States toward these huge centers of power. Only casual grumbling was apparent when several huge financial institutions were "bailed out" by a friendly government. There was little complaint that these elite capitalists who praised laissez-faire theory had in fact gladly accepted a huge handout. Further, the help came with the full realization that the officers of these companies were guilty of mismanagement.

John Perkins has called attention to the perils of an expanding "corporatocracy." Those who have taken a close look at corporate operations have voiced concerns other than size and influence. Included is recognition that a corporation is a device used by democracies and dictatorships; they may be led by a saint or a sinner; it may produce pabulum or poison and they have a bad habit of privatizing profit while socializing risk.

Because these mammoth centers of wealth and power are necessary in modern business, we are well advised to pay attention to the concerns of John Perkins and keep a watchful regulatory eye on these leviathans.

Allan Powell is a Hagerstown resident who writes for The Herald-Mail.

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