How big corporations took over Western governments
Jul 7, 2024
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Political economist Radhika Desai discusses how corporations have overtaken Western governments. Topics include neoliberalism myths, corporate power dynamics, pseudo civic neoliberalism, influence on globalization, and industrial policies in response to China's rise.
Corporate social responsibility (CSR) masks privatization's negative impacts on services and investment.
Neoliberalism prioritizes corporate dominance over competitive markets through minimal state intervention.
Globalization under neoliberal policies favors capital markets over productive investments, leading to crises.
Deep dives
Corporations' False Claims of Social Responsibility
Corporations attempt to mitigate concerns about their vast growth by promoting corporate social responsibility (CSR) as a voluntary behavior without regulation. However, examples like Thames Water in the UK reveal how privatization led to decreased investment and declining services despite high dividends paid to owners, exposing the myth of CSR's inherent social responsibility.
Evolution of Neoliberalism to Market Fundamentalism
Neoliberalism, associated with maximizing individual liberties and economic interests, emphasizes minimal state intervention in the economy in favor of capital dominance. This ideology perpetuates the notion that market freedom is the solution to economic issues, endorsing corporate power over competitive markets. Despite claims of the end of neoliberalism, its essence thrives on preserving corporate power and controlling state economic roles.
Neoliberalism's Contradictions and Impacts on Globalization
The application of neoliberal policies, steering away from competitive capitalism to a monopolistic state, has seen continual shifts in neoliberalism's practices, contradicting its initial free market principles. Globalization, often mistaken for enhancing trade, primarily focuses on opening capital markets rather than productive investments. This led to crises like the East Asian financial downturn, highlighting the detrimental consequences of neoliberal globalization.
US Industrial Policy Facade and Competition with Chinese Socialism
The US's recent embrace of industrial policy aims to bolster competitiveness against Chinese socialism, reminiscent of previous attempts against Japanese capitalism. However, the US faces hurdles like conflicting capital interests, federal limitations, and uncoordinated infrastructure. The contrast with China's state-directed investments in productive sectors emphasizes the futility of US industrial policies without systemic changes.
Challenges in US Neoliberal Policies and Necessity of Socialist Alternatives
US neoliberal policies struggle under corporate influence and financialization, hindering industrial progress and hampering effective industrial policy. While voices advocate industrial strategies, transformational shifts towards public ownership and cooperative financial practices are crucial to overcome neoliberal constraints and uplift productivity. Embracing socialist frameworks offers a pragmatic solution to address system-level discontent with capitalism's limitations and failures.
How did Western governments get to the point where major decisions are made by and for large corporate monopolies? Ben Norton is joined by political economist Radhika Desai to discuss neoliberalism and the myth of the free market.
VIDEO: https://www.youtube.com/watch?v=tczNLhfdQ7A
This is based on chapter 6 of Radhika's book "Capitalism, Coronavirus and War". You can download it for free here: https://geopoliticaleconomy.com/2023/02/17/capitalism-coronavirus-war-geopolitical-economy-radhika-desai/
Check out other episodes in the series here: https://www.youtube.com/playlist?list=PLDAi0NdlN8hNZoKp0XsLFwSxxlMQu6ye8
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