Corporate capitalism

Corporate capitalism

Corporate capitalism is a term used in social science and economics to describe a capitalist marketplace characterized by the dominance of hierarchical, bureaucratic corporations, which are legally required to pursue profit.

A large proportion of the economy and labour market falls within joint stock company or corporate control.[1] In the developed world, corporations dominate the marketplace, comprising 50 percent or more of all businesses. Those businesses which are not corporations contain the same bureaucratic structure of corporations, but there is usually a sole owner or group of owners who are liable to bankruptcy and criminal charges relating to their business. Corporations have limited liability and remain less regulated and accountable than sole proprietorships.

Corporations are usually called public entities when parts of their business can be bought in the form of shares on the stock market. This is done as a way of raising capital to finance the investments of the corporation. The shareholders appoint the executives of the corporation, who are the ones running the corporation via a hierarchical chain of power, where the bulk of investor decisions are made at the top, and have effects on those beneath them.

Corporate capitalism has been criticized for the amount of power and influence corporations and large business interest groups have over government policy, including the policies of regulatory agencies and influencing political campaigns. Many social scientists have criticized corporations for failing to act in the interests of the people, and their existence seems to circumvent the principles of democracy, which assumes equal power relations between individuals in a society.[2]

Thomas Jefferson, one of the founders of the United States democratic system, said "I hope we shall crush ... in its birth the aristocracy of our moneyed corporations, which dare already to challenge our government to a trial of strength and bid defiance to the laws of our country".[3] Franklin D. Roosevelt, in an April 29, 1938 message to Congress, warned that the growth of private power could lead to fascism:

[T]he liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism—ownership of government by an individual, by a group, or by any other controlling private power.[4][5][6]
[...] Statistics of the Bureau of Internal Revenue reveal the following amazing figures for 1935: "Ownership of corporate assets: Of all corporations reporting from every part of the Nation, one-tenth of 1 percent of them owned 52 percent of the assets of all of them."[4][6]

Dwight D. Eisenhower criticized the notion of the confluence of corporate power and de facto fascism,[7] but nevertheless brought attention to the "conjunction of an immense military establishment and a large arms industry"[8] in his 1961 Farewell Address to the Nation, and stressed "the need to maintain balance in and among national programs -- balance between the private and the public economy, balance between cost and hoped for advantage."[8]

See also

References

  1. ^ Statistics about Business Size (including Small Business) from the U.S. Census Bureau
  2. ^ Bakan, Joel (writer) The Corporation (2003) (Documentary)
  3. ^ http://etext.virginia.edu/jefferson/quotations/jeff5.htm
  4. ^ a b Franklin D. Roosevelt, "Recommendations to the Congress to Curb Monopolies and the Concentration of Economic Power," April 29, 1938, in The Public Papers and Addresses of Franklin D. Roosevelt, ed. Samuel I. Rosenman, vol. 7, (New York, MacMillan: 1941), pp. 305-315.
  5. ^ "Anti-Monopoly". May 9, 1938. Time magazine.
  6. ^ a b Franklin D. Roosevelt, "Appendix A: Message from the President of the United States Transmitting Recommendations Relative to the Strengthening and Enforcement of Anti-trust Laws", The American Economic Review, Vol. 32, No. 2, Part 2, Supplement, Papers Relating to the Temporary National Economic Committee (Jun., 1942), pp. 119-128.
  7. ^ Ira Chernus, "Eisenhower's Ideology in World War II," Armed Forces & Society (1997) 23(4): 595-613
  8. ^ a b http://coursesa.matrix.msu.edu/~hst306/documents/indust.html

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