Social Origins of the American Corporate Predator State

Jamie Galbraith’s recent book describes modern (Bush-Cheney) Republicanism as creating a “predator state”. Its predatory aspects are starkly visible in the gangs of corporate lobbyists who roam Washington DC, the Halliburton Iraq war procurement scandal, and the corruption and incompetence that surrounded the Hurricane Katrina relief effort.

However, the broad concept of a predator state needs qualification as we are really talking of an “American corporate” predator state. Thus, the predatory nature of contemporary US governance is quintessentially linked to corporations, and it is also a uniquely American phenomenon.

Kleptocratic predator states, like Mugabe’s Zimbabwe or Mobutu’s Zaire in Africa, are fundamentally different. There is no equivalent in Europe, and none in East Asia where ruling elites have a sense of obligation to the nation even as they often enrich themselves illicitly. Nor too is there an equivalent in Latin America because government there never reached an economic size proportional to that of government in the US.

It is important to understand the social origins of the American corporate predator state because understanding is a necessary part of developing responses for caging the predators and replacing them with another better order. Those origins clearly trace back to the military – industrial complex that President Eisenhower warned about in his final televised address to the nation on January 17, 1961.

That complex has captured politics and corrupted the business of government, including of course the conduct of national security policy. The fact that it has wrapped itself with the flag and entwined itself with the military makes it impossible to confront without being charged as unpatriotic. Worst yet, its enormous enduring profitability has provided a model for imitation by other industrial complexes like Big Pharma and Big Oil.

The political success of these predators is clearly linked to money’s role in politics. Money gives the power to buy the political process, and that power is defended by a gospel of free speech that takes no account of the fact that out-shouting someone is qualitatively equivalent to silencing them. Economics also comes to money’s defense with its absurd myth of a market for ideas in which participants compete on a level playing field and truth is effortlessly sorted from error.

The American worship of business and businessmen, which Sinclair Lewis (Babbitt, 1922) wrote about long ago, also plays a role. This worship privileges business over thought and other activities, and is behind the dismissive sneer “if you’re so smart how come you are not rich?” As a result, Americans are all too willing to hand over their government to business predators. Today, it is in Goldman Sachs we trust.

Another feature of business worship is a tendency to conflate profit with free markets. That means the distinction between fair competition (which is good) and fat profits (which are bad) is lost, thereby providing cover for predators.

Lastly, there is the legacy of the Cold war which contributed to economic dumbing-down and suppression of awareness of class and class conflict. This suppression was seen as necessary for blunting the dangerous appeal of Soviet communism, but a consequence was to create blindness to the predators in our midst.

All of this reveals a deep deficit in America’s social and economic understanding (some deficits really do matter). And as long as this deficit remains, the predators will have a starting gate advantage in the game of political persuasion.

Yet, how to close the deficit and insert another understanding is an enormous challenge. There are deep institutional obstructions in the academy, the media, and the Democratic Party. Moreover, raising these issues may create unsettling cognitive dissonance that pushes voters into denial and a closer embrace of the predators.

In effect, there is a paradox to be solved. Lasting progressive political victory requires transforming understanding, but the immediate political incentives are aligned to discourage engagement with such a project.


Originally published at Thomas Palley and reprduced here with the author’s permission.

27 Responses to "Social Origins of the American Corporate Predator State"

  1. Geraldo Lino   August 20, 2008 at 10:28 am

    Mr Palley, please accept my warmest congratulations. This is one of the most concise and precise descriptions I’ve seen about this crucial challenge of our times, not only for the US but for the whole world too. Fortunately, the devastating consequences of such a flawed “paradigm” are becoming too evident to be overlooked.

  2. Guest   August 20, 2008 at 1:09 pm

    Dear Mr. Palley:This is written in response to “Social Origins of the American Corporate Predator State.”I think the Scriptures, essentially the teachings of Christ, precede and augment your poignant commentary. Jesus Christ, in the Sermon on the Mount, warned us to lay up treasures for ourselves in Heaven and not on earth. Since our selfish corporate and governmental worship of money and wealth actively defy His wise instructions, (and since we were put on notice Biblically of the destructive power of that false worship,) we have only ourselves to blame as we fall screaming into darkness, economic, personal,financial and, I regret to say, eternal. We bear upon ourselves the consequences of actively embracing false, and dare I say, diabolic, values.If this sounds too much like a prophecy of doom, please consider it one, so that we may be warned and may be healed by embracing the Source of all temporal and eternal healing.Wes Nielsen

  3. akim   August 20, 2008 at 5:00 pm

    Mr. Nielsen, I’m glad you found that biblical warning against greed. Too bad so many christians get suckered into voting for the Republicans that cross-dress as Christ-lovers to push their pro-business agenda. Either some christians haven’t read that part of the bible you cited yet or they don’t see past the Republican party’s (or is it just Bush’s?) religious pretense.

  4. Mandarin   August 20, 2008 at 9:09 pm

    On target. To the factors above, add McCarthyism, domestic spying by police and FBI, the purging of the concept of social class from academic Sociology, the dumbing down of Political Science into a branch of statistics, and the universal propagation of religion as a mass opiate. It’s an easy, lazy shutout for predatory capital. Only a domestic crisis of the kind that’s brewing offers even a hope of change – and then only that offered by the liberal wing of the rulers.

  5. Guest   August 21, 2008 at 2:14 am

    Bravo!

  6. connski   August 22, 2008 at 2:20 am

    One thing omitted in an otherwise astute article; the conflation of democracy with capitalism. Democracy is a political system originating in classical Greece. Capitalism is an economic system developed in Europe in the eighteenth century. Democracy depends on open debate among the people. Capitalism organizes labor and products to produce profit. They are not the same and one does not depend upon the other. Our Constitution tries to guarantee democracy in many ways. It says nothing about capitalism.

  7. Mathieu   August 22, 2008 at 3:55 am

    Precise and to the point. How much money is raised each month by (presidential) candidates is considered as important and normal political news. And it is striking how this money manages to persuade many people to vote against their own interest (from a tax policy point of view for example). This hints that America is a moneycratic system, not a democratic system.Connski, I believe one could develop the argument that capitalism (one dollar, one vote) and democracy (one person, one vote) are somewhat contradictory. What we are witnessing is capitalism replacing democracy in politics. Conversely, one could imagine democracy replacing capitalism in the workplace. This is just a question of capital hiring employees vs employees hiring capital (just to point out how extreme the current situation within the spectrum of possible situations).

  8. Guest   August 22, 2008 at 5:56 am

    The Republic created in the colonies by the revolutionaries of the late 18th century was an excellent form of governance. Not a pure democracy (mob rule) but rather a democratic republic governed finally by the U.S. Constitution which permitted a very limited federal government for defense and trade but also protected individual rights from government itself. We don’t have that anymore. Now we have an enormous federal, state and local cancer that purports to be all things to all people while draining us of sustenance and individual liberty. We as a people have been stripped of personal responsibility: government is become god. We expect any problem to be solved by someone else and have in the process lost much of our personal and financial independence.Capitalism is the most logical of all economic structures. People are rewarded for success and suffer the pain of failure (Darwin anyone?). The survival/success of that which works insures that we are constantly progressing as a society. We don’t have that anymore either. Our abdication of personal responsibility has permitted capitalism to morph into something else, call it what you will, perhaps “too big to fail/government subsidized/entitlement capitalism”? It is a little too early and my morning coffee has not quite done its job to come up with a good name.The really good thing is that we recognize the problem and are free to talk about fixing it! Happy Trails!

  9. roger   August 25, 2008 at 1:01 pm

    capitalism has morphed into something else,I call it Accumulation unlimited.And accumulation will proceed till there is nothing left to accumulate