Corporations and Communism -the Same Fatal Flaw!!!
Luckily, we live in a world where Communism, as a world power is pretty well subdued. The Russians busted up into various separate countries. Cuba is about where Fidel Castro is healthwise, old, creaky, and on its last legs. North Korea is more of a lunatic asylum, than a country, although their acquisition of nuclear weapons and missiles means they will be humored by all.
China is some kind of weird hermaphrodite with a Communist government, and mostly capitalistic economy. If China, was a hooker, and hanging out on a corner under a red light, he/she/it would have something to offer everybody. And at a lower price than the competition. Soooo, what happened to “communism” particularly the kind where I read about peasants happily hoeing potatoes beneath a huge statute of Joseph Stalin while singing Meadowlands or Way Down Beside the Volga River???
I don’t think it was the masses yearning for freedom, although that is a good thing. Let’s face it, most of the human race has lived under some kind of tyranny since the beginnings of civilization. And sometimes, living pretty well as long as the ruling class kept their manias, klepto and otherwise, under some kind of control. Benevolent despots seemed to work pretty well as I remember from my history classes. If the royalty in England had kept its power, I suspect Modern England would look pretty much like Modern England.
Some people think it was the gross economic inefficiency which destroyed the Soviet Union. The Soviets just could not keep up providing its citizens the goodies that were so common in the West. There were even food shortages in a country which was capable of putting men into space. The problem was, there was just no personal responsibility or personal culpability anywhere along the line. No one was personally responsible for getting potatoes from wherever in the Soviet Union to the Soviet dinner table. Railroad commissars lived like commissars whether the spuds survived or sprouted on the sides of the tracks. And, they got to shop at special stores befitting their status. Because they were TCTF. (Too Connected To Fail.) It was like the Soviet Union was run for the benefit of the 1% or 2% of the country who were members of the Communist Party.
The farmers might grow plenty of spuds, but the collective responsible for running the trains did not depend on revenue from the farmers to keep running their trains. No, the rewards, as meager as they might be, were divorced from both performance and responsibility. Animal Farm by George Orwell is illustrative. When everybody owns something, then nobody owns anything. But I think this same fatal flaw has infected America’s Big Corporations.
A corporation is an artificial entity, owned by it stockholders, run by managers, and supposedly overseen by a Board of Directors. Ownership of Big Corporations is very spread out. The law says that ownership of as little as 10% of a company’s stock makes you a “insider”, and effective control of a corporation can occur with far less than 51% of a corporation’s stock. What I am saying is that this has led to the same problems faced by the Communists. Where everybody (or a whole lot of people) own something, then nobody owns it. And personal responsibility flies out the window. The system begins to run the same way the Soviet Union did, for the top 1% or 2%, and everybody else eats moldy potatoes. Our corporate CEO’s are about the same as Soviet Commissars. Connected, overpaid, and not personally responsible for long term performance or results.
1) Approximately 9 percent of net corporate profits went to the top five executives in major corporations in the ten years up to 2004 according to Harvard professor Lucian Bebchuk—twice what it was in the mid 1990s. All this was approved by boards.
2) Boards effectively nominate and re-nominate themselves. It is extremely difficult for outsiders to influence this process. One cannot vote “against” a director after he or she is nominated. One can only “withhold” votes. Thus, in theory, one vote for a director will outweigh a million withhold-votes. Almost every election has as many candidates as there are open positions.
3) Losses to shareholders from failed company leadership:
* Merrill Lynch–over $60 billion
* General Motors–over $52 billion
* Lehman Brothers–over $45 billion
* Fannie Mae–over $90 billion
* Bear Stearns–over $20 billion
* Citigroup—over $200 billion
* Countrywide—over $22 billion
These examples are from:
But it is not the purpose of this Internet Article to prove these allegations. That has already been done by others, and we are all of us living through a depression caused in large part by the breakdown of the system. I recommend Econned by Yves Smith of the Naked Capitalism blog to any who disagree.
My purpose is to get people to thinking the same way about the problems with Big Corporations, as they used to think about the Soviet Union. If a lack of personal responsibility there caused that collapse, can we expect a different result??? And we go one step further than the old Soviets — our failed commissars have Golden Parachutes to ease the transition.