Monster Capitalism and the Complicit State

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MAY 28, 2014

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The “Close-Embrace” System

Monster Capitalism and the Complicit State

by NORMAN POLLACK

The phrase “close-embrace” to describe the incestuous relationship between business and government in advanced capitalism is by Masao Maryuma, a Japanese political scientist to describe corporate concentration under the blessing and encouragement of government. This is, along with the centrality of war and market expansion, among the most salient integral features of capitalist development in its progression to monopolism, hierarchical class structure, and establishing a full-blown partnership with government: the Corporate and National-Security States merging, with national security concerned as much with protecting the market share and freedom from adverse regulation of the dominant firms in the industrial and financial sectors, as with putatively repelling a foreign foe and protecting the “homeland”. The upshot, fascism without, necessarily, the concentration camp—fascism predicated on the internalized repression of the populace, conditioned to look to the business system as the genius of the nation, its arbiter of taste, its salvation. The trickle-down paradigm follows, as does the moral superiority of those at the top AND the enterprises they lead—conversely, justified class-stratification where the lazy and/or subversive (i.e., those maladapted to the incentives offered by capitalism) fall deservedly into an underclass.

For Masao Maryuma, a description of the Japanese political-economic-ideological System, it is also the structure for what Barrington Moore, in “Social Origins of Dictatorship and Democracy,” characterized as “Asian Fascism”. And It is not off the mark for Franz Neumann’s analysis of German fascism in his book, Behemoth, where Naziism rests on the economic foundations of concentrated corporate organization, the State, incorporating within it, as also in Japan, its structure of militarism and ideology of conquest and expansion, to move therefore from corporate business organization to CORPORATISM as the core of societal organization and its ideological essence of hierarchy. Fascism, yes, no frills—the structural stage of advanced capitalism providing its own solutions for the stabilization of sector after sector (in Naziism, business “fronts”) on behalf of the dominant players, the coordination of the leading firms at the top, and the social engineering needed to achieve the social discipline (read: feelings of solidarity with those above, wrapped in the allegiance to the State, itself inseparable from the firms themselves) of the people. Workers are the soldiers-in-industry. They’re also of course the cannon fodder in implementing the dreams, imperatives, and practicalities of expansion—if the System is to grow and expand.

Labels are off-putting, especially in a society which pretends to, and whose domestic and international prestige is bound up with, democracy. Yet Japan, Germany, and the US form the triumvirate, in historical experience since the 1930s, the trends working their way forward with the advent of modern industrialization decades earlier, of fascism: concentration, hierarchy, militarism. In America, one who exposed the systemic features of the American political economy to careful scrutiny, as did Masao Maryuma, Barrington Moore, and Franz Neumann did elsewhere, was Gabriel Kolko, whose death in Amsterdam last week was a sad loss to American radical scholarship. I say “radical,” because much related scholarship into business organization and military expansion skirted around his seminal work, indeed, ignored it altogether, an establishment academic perspective in blindfold, or worse, the calculated mode for achieving rewards in the academic marketplace. Kolko did not play it safe, and although he was not in the habit of appending the term “fascism” to his evidence and interpretation, if the shoe fits, as I believe his findings do, then by all means let America own up to that and wear it.

Kolko spoke of INTERPENETRATION, a perhaps more pointedly structural term for “close-embrace,” in his analysis of government-business relations and the regulatory framework. But the result is the same, in his research borne out by the formation and role played by the Interstate Commerce Commission, Bureau of Corporations, Federal Reserve System, and Federal Trade Commission, all in the generation which saw the critical growth of a capitalist-industrial order, and a complementing foreign policy, from the Open Door to the Battleship Navy to global intervention (sometimes separate, sometimes merged). I raise this brief discussion, partly to suggest the use of fascism, partly in remembrance of and tribute to Kolko for breaking the glass ceiling of “authoritative” scholarship still very much with us, and partly, for immediate purposes, to reintroduce General Motors and its ignition death switch into current discussion about capitalism and fascism (following two weeks ago my CounterPunch article on business criminality, exemplified by GM).

GM is not the corner grocery store (although its ads may try to give that impression: the bigger, the more homey and civic-minded), but, like JPMorgan Chase, and several others (although the cross-wiring of business and finance, as with GM, is ever-shrinking the power base), it holds together the basic fabric of society, including that which is worth fighting and dying for. It is not about to go under, however heinous its crimes—the crimes, in fact, if not a badge of respectability, serve, when they’re unpunished, as the validation of GM’s power and importance. Like the credential in capitalism, “Too big to fail,” patent criminality, followed by cover-up, signifies arrival in the nation’s pantheon as honorable by virtue of immunity, not unlike Obama’s get-out-of-jail-free card but on a more colossal level. In a fascist-prone society, everyone loves a hero, particularly a bully, and more particularly a corporation that shows that it is above the law—and a president who does the same. (Drone assassination and ignition death switch are two peas in a pod.)

[Disclosure: this is not an abstract critique of corporate capitalism; I am mad as hell at the way powerful corporations, as with GM, are grinding their victims into the dust—behavior that is systemic in capitalist development as standard procedure in the process of monopolism and structural maturity, particularly here, on the threshold of senescence. Relatedly, I wish radical writers would think foremost: evidence before ideology. I say this because one CP reader, in emails, is infuriated that I have used the New York Times, calling it names I wouldn’t want my grandchildren to hear. In Kolko’s spirit and that of any radical historian, one digs for the facts of, in this case, investigative reporting, learning through practice and other corroboration how to discount for or ignore editorial policy, which in The Times’s case is assuredly in the US-hegemonic tent, including, perhaps most of all, foreign policy. There is much to be learned from this source, and then go one step further, making the evidence a point of departure for analysis. Shall we practice censorship, because we don’t like the source of the evidence?]

There is plenty of blame to go around for this prototypic– yet, given its perpetrator’s importance, with more than the usual significance—corporate behavior. I am drawing on The Times’s article, by Rebecca Ruiz, Danielle Ivory, and Hilary Stout, entitled, “13 Deaths, Untold Heartache, From G.M. Defect,” (May 27), in which we see the classic pattern of business-government relations (although they do not need to conceptualize their account thusly, the evidence speaking for itself of inaction, collusion, and worse) to stiff-arm the public and mock the victims—an attitude sanctioned at the top, because the Bush- Obama administrations have responsibility for the conduct of their regularity agencies. And, accordingly, should be held responsible, as well as the corporations enjoying their protection. The article begins with the case of a young woman whose boyfriend was killed in a 2004 car accident, she at the wheel. For years she suffered intense grief: “It’s torn me up. I’ve always wondered, was it really my fault?”

Not until last week (May 21-25)—the accident being in 2004—was the fellow’s mother notified by the National Highway Traffic Safety Administration that his death was linked to an ignition switch defect, “the first time the family had been told anything other than negligence [by his friend] contributed to the accident.” Stone-walling, by both government and corporation alike, and, as I read it, even that news was not forthcoming until The Times had conducted an independent examination—I say “independent,” because there was cooperation neither from GM nor the NHTSA—nor did the latter compel GM to reveal/release the information. The Times did due diligence piecing out on its own the data, including that involving this last death. (Of course, the number 13 is scandalous, GM counting only front-end collisions involving a single car—one death not counted, e.g., was actually a person in the back seat where no seat belt was present. Even “experts” admit the body count will go higher, perhaps, I would add, much higher, when GM’s criteria for counting the dead are scrapped so that the focus is on the defective switch, rather than, in its campaign of vilification of the victims, charges of drugs, negligence, and alcohol.) The mother, plaintively, after receiving the email: “I was angry—at him, and at Candace for a little bit [both had experimented with recreational drugs]. Then you find out that it wasn’t them being careless. The car malfunctioned, and they didn’t have a choice.”

This puts a human face on the tragedy, while GM envelopes itself in a mask so as not to reveal its culpability and true identity. Am I singling out GM? No, this goes for much of American capitalism. A human face is verboten, lest people begin to weigh the enormity of the crime; so, therefore don’t even reveal the victims’ identities. This is GM at its most sophisticated, and really, its crudest, knowing what the System allows it to get away with. The reporters write: “Ever since G.M. began recalling 2.6 million small cars with the defective ignition switch in February, the company has refused to disclose the names of the victims or details of the accidents—even to some survivors of the crashes and relatives of the dead. G.M. also has not shared its interpretation of the data from the so-called black boxes that helped the automaker identify the 13 deaths, leaving some local and state investigators to draw their own conclusions—often erroneously—about the crashes.” And GM moves from impersonal, to straightout Kafkaesque: “Inside G.M., the nation’s largest automaker, some of the 13 victims appear on charts and graphs with a date and a single word: ‘fatal’.” By preconception, really, “police files and state highway patrol records” do no better; “they [victims] are the subjects of accident investigations, tragic but mostly unremarkable, some involving alcohol, inexperienced drivers or failure to wear seatbelts.” Anything but the defective ignition switch!

In fact, they didn’t stand a chance: “All but one of the accidents were single-car crashes {the exception, a drunk-driver hitting one of the cars], in which the driver lost control [because of a loss of power, etc.] and slammed head-on into an obstacle, usually a tree. In every case, the air bags did not deploy.” Like the victims of drone assassination, they were treated as anonymous ciphers. Here, the corporate spirit of GM, again not alone in this world, shines through. As Ruiz and the others write: “When presented with the victims’ names compiled by The Times, G.M. would neither confirm‎ nor deny them. ‘We are not publicly identifying victims out of respect for families’ privacy,” Greg Martin, a company spokesman, said in an email. He added, ‘Out of respect for their privacy, we do not discuss private conversations that we may have had with families.” With solicitude like that, who needs Caligula, Jack the Ripper, or for that matter Obama, the current patron saint of deregulation and shield for corporate practices.

GM, confident a law unto itself, retreats still further into itself. The reporters state, “Some relatives say that the automaker has refused to even communicate privately about the accidents [recall the objection to public disclosure] and they suspect the company’s secrecy has more to do with containing its legal liability.” Another human face, the mother of a daughter killed in a 2006 crash and among the 13: “It would have been nice if they had acknowledged it, at least to us. G.M. has just been hiding behind lawyers through this whole thing.” The words, “at least to us,” are heartbreaking. If GM had not withheld information, police officers “might have changed their investigations.” The state trooper investigating the crash described above, and jumped to the conclusion the young woman was at fault, told Ruiz, reporting from Texas, that “had he known about the ignition flaw, ‘in essence that would change everything.’”

There is more, The Times compelled to do its own leg-work, a compilation that gives the lie to GM accusations of victim-deficiencies, but this single sentence identifies the problem: “The company has acknowledged that as early as 2001 it had evidence that the ignition switch could, if jostled, suddenly shut off the power in a moving car, disabling air bags and impeding braking and steering systems.” Hence, single-car crashes, the obscene defamation of victims, the corporate hubris with high-powered attorneys in attendance. Oh yes, settlements; even then, “lawyers say the ignition switch defect was not identified in the litigation as a contributing factor.” This was only disclosed in a deposition for a separate case taken last year. As for the settlements, quintessential corporate behavior having the law standing behind it: “The families would not discuss the precise terms of their settlements—most are subject to confidential terms—but some said the payments were not large and the process was sometimes unpleasant.” I give the last word to the mother quoted earlier: “Those attorneys dragged my son through the mud, and he wasn’t even there to defend himself.”

I think we have seen a microcosm of impending fascism in what GM does and what it represents, in which one must look to structure (not the formal values of a society, generally honored in the breach), where, as here, hierarchy and democracy are completely incompatible, the former encasement for corporate irresponsibility, assisted by the protective—and friendly—arm of government. I wish it were possible to stand up for Mrs. Erickson’s son, and bring GM to its knees, in which case I would say, Come on, America, take off the gloves, put on brass knuckles, and SHAME GM. And now–radicals will have to turn away, for I would also say, SHAME the UAW for playing the game. Wages, shop-floor issues, union recognition, benefits, emphatically yes, but what about the larger society? Presently, as workers, there is little or no recognition of the social welfare. The reason, because this would mean questioning, going against, capitalism itself. Labor will stand up for capital because it means jobs. UAW/GM, until that changes, or at the very least results in the greater structural democratization of American industry, along with a sustained and defiant critique of US foreign policy, there will be more ignition killer switches at home, drone assassinations abroad. And when I say I do not intend to single-out GM alone, I also do not intend to single out the UAW alone—both are representatives of whole communities of interest which will have to change if the political economy is to be dedicated to the needs of the people.

MY New York Times Comment on the article, same date, follows:

GM: Too big to fail? I hope not. Deception, cover-up, high-powered lawyers, all at every turn. Lying that suppressing names of victims is done out of courtesy to their families, is unconscionable and disgusting. Parameters applicable to dead-and-injured count, slimy and irresponsible. Sitting on information of possible defect having lethal consequences, worse than shameful. In plumbing the depths of GM MORAL DEPRAVITY, the cover up is almost as bad ad the ignition death switch.

“Her 1-year old great-grandson survived but was paralyzed from the accident,” should, as step one, be printed on every GM ad, piece of stationery, executive salary and bonus check. A criminal corporation at the top of the US industrial pyramid does not speak well for the health and integrity of American capitalism. And will all those investigations–federal, state, internal–result in punishment, especially commensurate with the crime. Very, very doubtful. For what allowed GM to think it could get away with its behavior (in fact, it probably has) is a regulatory system designed to PROTECT rather than regulate firms and activities in its charge. Fraudulent from day one (see the late Gabriel Kolko’s “Triumph of Conservatism” and “Railroads and Regulation” for the genesis of the interpenetration of business and government, the latter shielding the former, as in ICC, TR’s Bureau of Corporations, and, of course, Wilson’s Federal Reserve System and FTC).

GM unscathed, regulation a farce!

Norman Pollack has written on Populism. His interests are social theory and the structural analysis of capitalism and fascism. He can be reached at pollackn@msu.edu.

http://www.counterpunch.org/2014/05/28/monster-capitalism-and-the-complicit-state/