corporate corruption, politics
and the ‘law’

Index
introduction
Japanese devastation—modern corrupt corporate states
corporate moves to ‘own’ the law
bribery, corrupt corporations and corrupt states

Enron, Bush, and many others
corporate corruption
cartelisation and monopolies
methods used by large companies to curtail competition

academic establishment economics is a fairy story!
bibliography with reviews
end notes

introduction

All that is necessary for the triumph of evil is that good people do nothing [10]

The books, examples and media reports cited in this document tend to give the impression that corruption is some localised problem in some particular country, industry or corporation. This impression is false and misleading.

The corruption is endemic in all human society, at all levels, and in all activities. A very great deal of energy down the generations and centuries has been, and is still being, directed at mitigating the worst effects. But society still has far to go before it is reasonably civilised. Doubtless, it will take a great deal more effort before human society is generally pleasant and comfortable.

Extension of wealth is a considerable contribution to greater content. However, that content is still threatened by lack of sane planning and, inherently, by the intricate web of generally corrupt (or foolish) behaviour sketched below in this document.

A central problem is the distribution of wealth to those who are unable economically
to command the fruits of vast productivity of modern society.

This situation can only continue to spread as the productive machines, for instance car factories, become ever more automated and thus operated by a very few people. In contrast, the potential customers number in millions. The customers move into a situation where they have nothing much useful to swap for the latest shiny toy, so the natural tendency is for the price of the toy to move ever downwards. Steadily, any requirement for ‘work’ shrinks.

Faced with this problem, Keynes suggested,

“The important thing for Government is not to do things which individuals are doing already, and to do them a little better or a little worse; but to do those things which at present are not done at all.” [1]

However, as the automation of production develops, the number of useful things that a government can do also shrinks. The government then ends up doing things that are destructive, like organising for a war (Hitler in the 1930s), destroying the environment (Japan, currently), constant bureaucratic interference, and so on. Any sane societal activity must either be directed at providing for serious need, or at preparing people for useful or acceptable leisure, or both; not directed to filling the pockets of politicians and corporations.

Japanese devastation—modern corrupt corporate states

Here are some photos of the destruction of Japan, but this is just a start. For instance, 60% of the Japanese sea front is now under concrete in make-work government corruption. An excellent description is given in Dogs and demons.

Throughout the West, a central problem is what to do with ever increasing numbers of economically marginal and under-educated people.

Each country is struggling with the problem in different ways, but persistently failing to confront the embarrassment of riches combined with the false shibboleth of ‘equality’. See also Franchise by examination, intelligence and education.

In Japan, the response is to cover the country in concrete, and then attempt to export the practice elsewhere in Asia.

In Germany, it results in a Socialist dole state with high ‘unemployment’ and eternal ‘students’.

In France, it results in the somewhat more rational high-speed- rail networks, a 35 hour week, and now a scheme to renew the disgraceful cités (HLMs—low rent housing), which eyesores disgrace practically every town in France.
Now, the new right-wing government is going to replace 700 of them over the next five years, so it says.

In Italy, whole families live off the dole of one lucky recipient.

In each country, ever increasing taxes (state theft from any who, foolishly and ‘inequitably’, attempt to ‘get ahead’) destroy businesses, while the ‘laws’ are made by politicians who are bought and sold by the large corporates and unions. ‘Laws’ which are systematically and deliberately designed to maintain the status quo, and to destroy any serious competition.

In America the free; it is cheap hamburgers and political kickbacks, a vast prison building industry and the mad ‘drug war’, a huge ‘illegal’ immigrant population who do the work in disgraceful conditions. For details, see Fast food nation and other excellent investigative work by Schlosser. See here and here for examples.

In Socialist Britain, the hypocritical national character seeks to tuck the problem away in sink estates and sink ‘schools’, while forcing wages down below viability levels. This is then ‘addressed’ by making ever increasing numbers go begging for handouts at government offices via intrusive ‘means testing’. This being done to such an extent, that recent estimates are that over 40% will soon be government dependent ‘clients’. Hence ‘the client state’.

Both the United States and Britain keep downward wage pressures on the uneducated, by a system of deliberate importation of ‘illegals’. Meanwhile everywhere the free economy—that is, the economy outside the reach of the government kleptocracies, and called by the government ‘the black economy’—steadily grows bigger.

Socialism is a system designed to systematically destroy wealth and freedom. As R.W. Lane said, when writing in 1943 about pre-war France in her idiosyncratic, but interesting book, The discovery of freedom, 0930073002.Without the free economy, France would long since have starved. She describes a country even more strangled in paper work and waste even than the present France (p. 44 onwards), where government ‘employment’ has recently increased to over 25% of the ‘working’ population.

The problem is handling and distributing the mass production, generated by a small proportion of the population, into the hands of those who have little input to that productive process.

It is absolutely clear that to obtain a more free society, and to distribute goods in an increasingly automated era, that some form of citizen’s wage is critical to future progress.

Naturally, the puritanical nations are finding it even harder to adjust to what amounts widely to a free lunch. But it is this increasing plenty, produced by ever fewer people and then by ‘thinking’ machines, that is at the heart of the social changes to which the advanced societies must learn to adjust, if the whole world is not to be covered in concrete, and asphyxiated by a blitz of paperwork.

corporate moves to ‘own’ the law

“Imagine for a moment that you are a video artist who is working on a new movie. In this movie, you would like to include the title track from Coldplay's newest album. In order to do so you must pay -- and rightfully so -- the record label, or whoever owns the copyright, to use the song. But what about the large Ansel Adams poster in the living room of your movie set, or the truck with the advertisement that drives through the street while you're filming? Will you have to pay for these incidental objects? The answer is yes.”

There is insufficient awareness of the degree to which corporations purchase politicians who then introduce ‘laws’ in order to serve the interest of the corporations and damage the interests of the public.

A recent example was a million-pound donation to Bliar and the Labour Party in the UK, which coincided with an election promise to ban cigarette advertising on Formula 1 cars, which proposed ban was then rapidly dropped after the general election.

Here are a couple of examples I came across recently while reading Schlosser’s Fast food nation.

• Kroc of Mcdonald’s gave $250,000 (see consumer price index (c.p.i.) graph) to the 1972 Nixon presidential campaign. The Nixon administration then supported what became known as the Mcdonald’s Bill that allowed the company to pay 20% under the then minimum wage. The Bill also allowed them to raise prices during a time of price controls that restricted other outlets. [p.37]
• The other example is from General Motors during the 1920s, who bought up large numbers of electric public transport systems and then closed them down (contrary to the law). In the meanwhile, GM persuaded the government to subsidise road transport by building the road systems. [p.16] This process is known as corporate welfare socialism.

Schlosser’s book is a very useful source on the way the world really works, rather than the moonshine peddled by the vested interests.

bribery, corrupt corporations and corrupt states

Enron, Bush, and many others

For another source for corporate ‘games’, see sample writings of Gregory Palast. On this badly organised page, click on the ‘Column Topics’ phrases (in grey column on left), for lists of articles.

This link is a taster for his book (which I have not read).

“Governor Bush was always cautious to avoid conflicts of interest-in this case, the conflict between the interests of his top donors, [....]”
—
“ [....] investing in politicians has a consistently higher rate of return than investing in plants or products.”

More examples of corporate abuse, mainly in the United States and the UK.

corporate corruption

Here is a sketch of alleged corporate corruption at Airbus, one of the two main international aircraft suppliers.

cartelisation and monopolies

In the UK, there is nearly complete dominance of the high street by cartels, with little or no real competition. The same pattern is clear in France. There, you might go into half a dozen supposedly competing outlets for white goods, comparing prices, usually only to find that there is virtually no price difference. Or you might decide it is not worth the time and bother checking in shops, and instead think that you can order, for instance, a telephone from one country to use in another. Don’t bother, the connection standards differ from country to country.

You think that is an accident? Not at all. Consider the current determination of the film industry, striving prodigiously to ensure that you cannot play your DVDs in a different place from the one in which you purchased it. This ploy exists only to achieve the following objectives: to stop you shopping around, and to squeeze larger profits in markets where they have already managed to eliminate retailer competition.

This is not some local corruption in some backward state, the pattern of corruption repeats itself around the Western world. In fact, you are more likely to pick up an item at a competitive price in a more ‘backward’ country, or in some more free port such as Singapore. Of course, when you return, you will find rows of customs officials (who are usually outside the control of any law) looking to tax you to make up any difference between the price you paid and the price in ‘your’ country, or even to steal your goods outright.

Then there is the EU ‘free’ trade area, in fact, an area of high tariff walls, designed to keep out free trade and to stop lower prices. In the hall of mirrors, as usual, corrupted language bears little relationship to realities.

methods used by large companies to curtail competition:

• Using court cases to tie up competition, by wasting the time and resources of competitors through endless expensive litigation. Of course, this very much suits the natural agenda of lawyers, which is to spin out any case for as long as possible rather than to resolve disputes, thus increasing fees. This will be discovered by any naive mug if they should foolishly allow themselves to become entangled in ‘divorce’ proceedings.
  


• Registering a continual stream of trivial blocking patents, which clearly have no serious innovatory value or creative input. For instance, one I have just encountered is Viagra chewing gum, registered by Wrigley’s. Usually you will never see such products, they are merely an attempt to block others from entering related markets.
  
  The patenting process is also designed to be immensely costly. The annual charges for maintaining a patent increase ever more each year, while protection in one legislative region will not give cover in another region. Thus a small inventor who registers a patent risks having his patent stolen ‘legally’ by big corporations, who trawl through local patent registrations and then register them in other legislative regions. It is very rare, therefore, for an innovator to profit from their work. Instead they are forced to work for a large corporation for a wage far below the real value of their work, to sell their rights cheaply, or even to face obvious plagarisation but be unable to afford to contest the highly-funded legal department of a big corporation.
  


• Continual attempts to extend ‘copyright’ ‘laws’ to extreme limits, by prolonging the ‘copyright’ duration until, currently, 70 years after the author’s death. Thus, the publishers concerned, who take the lion’s share of profits from a successful book, will continue to benefit from selling a successful author’s work for many years to come, while preventing anyone else from publishing a different edition. The author’s inheritors may, or may not, receive some financial reward for the work of their now dead ancestor. During the copyright period, anyone else wishing to publish this work, or even use more than just 5% of the work, will have to pay the publisher for the privilege.
  
  Publishers are consolidating into a small cartel of very large conglomerations, with much financial backing. This makes the publisher’ control of copyright easier, as they have the financial muscle to fight extended court cases.
  
  The implication of the Millennium Copyright Act is that it is illegal to receive any copyrighted material onto a computer. Look forward to copyright charges to read a document you found on the Net.
  
  Newspapers on the internet are putting restrictions on their archives such that any items from, say, a month or more earlier are unavailable for viewing without a further payment. Thus, the archives cannot reasonably be explored to expose lies published by the papers themselves, or by their colleague politicians.
  


• Constant delays in, or absence of, payments for services provided, thus forcing out or buying out all competition. Large orders are made, designed to soak up the capacity of small suppliers and thus, to establish dependence. Prices are under-cut in a predatory fashion in order to drive out competition, which is then followed by buying up assets and then raising prices, once a local monopoly has been established. Often a combinations of these ploys is used.

academic establishment economics is a fairy story!

Open any financial magazine or newspaper, and sure as blazes, it will not be long before you come across articles agonising about how terribly indebted the government, or corporations, or the public, are; and how this prefigures the collapse of the banking system or the end of the world as we know it.[2]

But this is complete nonsense. Let me take a ‘nice’, extreme example. By some estimates, the Japanese government is in debt to two and a half times its gross national product [GNP]. Pension commitments cannot be met, they howl, [3] and a similar (but lesser) situation exists throughout Europe. Companies cannot meet their pension commitments. The British government persuades its citizens into taking out private pensions, then the government raids those self-same funds for billions of tax, in order to pay inflated government salaries.

And yet nobody is starving, the productive capacity of industry continues to rise, maybe 50 or 100 times in a century, quite apart from being ever-improving products and a stream of previously unheard of products. The supermarket shelves are loaded with exotic foodstuffs, flown from all round the world, to be available for even the least skilled worker in the society. These untold riches in the West, compared with a century ago, hardly cover enormously extended lifespan and comfort.

Do you imagine that, suddenly, there is any good reason why people should be starving just because their government has paper debts? [4]

By my rough calculations, the value of a country is about 10 to 20 times the number associated with its GNP. [5] Thus, if the GNP of the UK is a trillion pounds, then the total valuation of all the property of the UK would probably be 10 to 20 trillion pounds. Similar calculations may be made for other Western countries.

It is said that, in Western countries, perhaps two percent of the population controls 95% of the country’s wealth—a very dubious claim. Much wealth is tied up in the massive pension funds supposedly representing the savings of the masses. Government has vast holdings in land, as well as other assets, and very wide powers to ‘regulate’. Let’s be a bit more realistic. In most Western countries, the top fifth of the population receives approximately 40% of the before-tax income.[6] The aforementioned wealth control is, in fact, more about power [7] than it is about consumption of fancy meals, or ownership of big yachts.

Returning to the huge pensions which are ‘owed’ but ‘cannot’ be paid; why? It is simply a matter of selling off some of this supposed wealth; that is, giving some of the property to those who have been ‘promised’ the pensions. Of course, this is not what will be done: the pensionable age will be raised, pensions will be lowered, or pensioners will just be told, “Hard luck, you have been cheated”.

One of the latest games is to claim that, with a rising population, we absolutely must have large numbers of poor immigrants coming into the economy in order to keep the aged. Well sure, that will drive down the wages of our own poorer people, it may even mean that they do not have to do the simpler jobs. However, most of these aged people are as fit at seventy as their ancestors may have been at fifty, and are perfectly capable of working. Moreover, recall that this society is capable of producing maybe one hundred times as much as our ancestors of only a hundred years ago, yet they did not become such a burden that society went into terminal decline. In fact, that society set about laying the groundwork for the immense wealth [8] we now enjoy.

If the people owing these pensions try to sell the property, in order to pay the pensions, then that would drive down property prices, and anyway, who could pay the price? After all, the potential customers are also up to their ears in debt. Recall that 1:10 or 1:20 ratio. If you really try to trade it all in a year, prices would drop to a tenth or a twentieth of their present levels. You see, it is all a hall of mirrors and illusion.

The wealth, the food, the land, the housing, the productivity are still there.

It is merely a matter of distributing them.

bibliography

paperback

2002, HarperCollins, 0060938455, $8.37
[amazon.com] {advert} {advert}

2002, Penguin Books, 0141006870, £3.99
[amazon.co.uk] {advert}

hardback

2001, Houghton Mifflin Co, 0395977894, $17.50
[amazon.com] {advert} {advert}

2001, G. K. Hall & Company, 078389502X , £30.95
[amazon.co.uk] {advert}

This is an excellent study of a single industry. Some caution should be exercised in noting that, despite the multiple abuses described, Americans have ended up with cheap food without the enormous output of energy involved when each family and individual produces their own meals. The society ends up with increased free time, or with available productive labour.

I was almost amused to read of poor, exploited 16-year-olds spending out their ‘exploitative’ low wages on the purchase of a car, an action which would have been beyond the dreams of the average teenager fifty years ago, let alone for billions of people around the world today.

The book gives fascinating descriptions of the applications of the perfume industry in food preparation, potatoes being shot from water cannons into cutters to reduce them to chips, and even a mechanical tasting machine.

The book is very useful for introducing people to the complexity and workings of a modern industry.

Note: It is easier to bring pressure by boycott upon some corrupt corporations than it is with government.

end notes

1. John Maynard Keynes, The End of Laissez-faire, 1926
   (JMK, Essays in Persuasion,Collected Writings of JMK, IV Politics)
   
   
2. A country’s internal, fiat banking system is not subject to ‘collapse’. See The mechanics of inflation for reasons.
   
   
3. For a typical example, see Dogs and demons, chapter 11.
   
   
4. For much more detail, see The mechanics of inflation.
   
   
5. See Quality of Life briefing document.
   
   
6. World Development Report, 1994, p. 220,221.
   
   
7. For much more detail, see Power, ownership, and freedom.
   
   
8. This vast wealth is not securely guaranteed for the future. For further discussion, see the suite of briefings documents on energy.
   
   
9. In past times, power was even more concentrated. There were in place honour systems and legal processes for enforcing debt: debtor’s prison and the ruin of reputation was common. With money backed by real objects, such as gold, debts were much less likely to be whittled away by inflation. Now, there is a saying in the USA that you are not real businessman until you have been bankrupt at least three times. Meanwhile, people at all levels of society walk away from their debts with very little serious cost.
   
   In many ways, this leads to a more humane society. But it has also become part of the calculation for big business and government, which use inflation, and a variety of other dishonesties, to manipulate away their supposed commitments. As the children are still being taught the morality of honour, they are easily cheated of their expectations, including pensions, by the ruthless behaviour of government and big business, who care not a fig for their paper agreements. This is, of course, leading to a widespread breakdown of trust in society.
   
   Even this is not all downside, but it does result in the masses being treated as children. Simply writing off an inconvenient debt, established in the course of poor judgement, does allow the corporation to remain in business and to provide work for the children, rather than simply closing its doors. This is part of the price we pay for huge and expensive production facilities, especially when government becomes a tool in the hands of, and a conspirator with, the large cartelised corporations.
   
   
10. Attributed to Edmund Burke (1729 – 1797).

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