John Singleton with Bob Howard, Rip Van Australia (Stanmore: Cassell Australia, 1977), pp. 57-59, under the heading “Corporate Capitalism”.
Across the bargaining tables of power, the bureaucracies of business and government face one another, and under the tables, their myriad feet are interlocked in wonderfully complex ways.
~ C. WRIGHT MILLS
Corporate capitalism is what exists in such countries as the U.S.A. and Australia. In a free market there is a complete separation of the State and the economy, whereas in corporate capitalism there is very close interaction between the two.
In a free market, where the government contents itself with ensuring that no one initiates the use of force, fraud, or coercion (thus outlawing such things as theft, murder, rape, fraud, misrepresentation, extortion), the only ways businesses can succeed is by offering the public products and services that it wants at a price that it can afford. Competition ensures that the best value for money wins out — there is a constant market incentive to produce the best quality product at the lowest possible price. There is as much variety, diversity and competition as the market will bear. The major objection raised against this idea is that it may start out that way, but eventually a few people or corporations would work themselves into dominant positions and start to “exploit the public”. To prevent this from happening, it is said, government intervention is necessary. (For a detailed discussion of this, see Monopolies.) This is a very plausible argument. However, it does not agree with historical fact.
Gabriel Kolko, an ardent opponent of “capitalism” and a revisionist historian, has shown in his book The Triumph of Conservatism that business regulation was not imposed on unwilling private businesses. Rather, in his words, “… the dominant fact of American political life at the beginning of this century was that big business led the struggle for the regulation of the economy … nor was it possible for many big businessmen to ignore the fact that, in addition to sanctions the federal government might provide to ward off hostile criticisms, the national government was still an attractive potential source of windfall profits, subsidies and resources” (pp. 57-58).
As has already been pointed out (see Bureaucracy), the State represents the political means of obtaining wealth. For most of its history government has been used as such by various vested interest and pressure groups. Certainly, in Australia, we have always had such a system of privilege — ever since the days of the convict settlement and the government’s creation of the “squattocracy” (the State or the government of the day being that of England, represented by the Governor).
Looked at in this light we can see the tragic irony of calling on present governments to protect us from the dangers of big business or “capitalism” in general. It is not big business that is the enemy. It is the State itself.
This does not mean that businessmen are all lily white and pure. They aren’t. Rather, it is simply recognition of the fact that if you build an instrument (that is, the government) that can be used to make enormous sums of money, and sit it down in front of an entire population, it won’t be long before there is a fight over who gets to use it. That’s simply human nature — and while we might deplore the fact that it is so, it doesn’t help very much. Similarly, it doesn’t really help to use our energies to build a bigger and more powerful government machine, which is, in effect, what most reformers are doing today. The only solution to the problem is to dismantle as much of the government machine as possible, and put it out of the reach of those people who would seek to use it to line their own pockets.
It is the exploitation of the State by vested interests that has led to almost every evil we currently suffer. The revisionist historians, like Kolko, Erkich, Horowitz, Rothbard, Barnet and Williams (most of whom are Left wing people and not at all sympathetic to capitalism), are putting together a formidable body of evidence to show that this is so. But unfortunately, not enough of the revisionist historians are aware of the crucial distinction between a genuine free market and a system of corporate capitalism. So they throw free enterprise out with corporate capitalism, and substitute for them what will be in effect, if not in intention, an all powerful socialist or communist state. Once again, the State wins out.
Freedom, on the other hand, would not only remove the evils of the state and such things as corporate capitalism, but it would also eventually remove all the psychologically and spiritually debilitating effects of our modern society, for here again the main impediment to diversity, to alternatives, and to a healthier culture, is the State and its attendant institutions.
We don’t believe that these points, or these distinctions, can be stated too often or emphasised too much. It is because of the terrible misunderstanding of the distinction between corporate capitalism and real free market capitalism that an enormous amount of time, energy and money is wasted today by the many and various groups, who, when all is said and done, all want the same thing — a voluntary society, free of exploitation, coercion and free of the spiritual sterility, that we see all around us today. If only we look before the great, last leap.
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