February 1, 2004

Jamie Court: Corporations and Liberty

By In Interviews

A new word has entered the American lexicon: “corporateer.” As defined by Jamie Court, the author of Corporateering: How Corporate Power Steals Your Personal Freedom… And What You Can Do About It, the term can be used as a verb- to prioritize commerce over culture, or as a noun- one who prioritizes commerce over culture. Either way, the author argues that large corporations today have become so powerful that not only do they control the major commerce in our culture, but in many ways have become the culture itself. In addition, the CEOs at the helm of some of these corporations have become like the old time buccaneers who steal and plunder at will in flagrant disregard of the law or any civilized code of ethics.

Court, an award-winning and nationally recognized consumer advocate, is the executive director of The Foundation for Taxpayer and Consumer Rights, a political action group that has been instrumental in helping ordinary citizens stand up to corporate interests. Throughout his career, he has been a social activist and champion for consumer rights. He helped pioneer the HMO patients’ rights movement in the United States, and he inspired the nation’s first flat-rate, low-cost auto-insurance program for the poor.

In his book, he describes in detail (with a plethora of facts and footnotes to back up his claims) how pervasive corporate control has become at every level in American society. One passage that is particularly telling deals with former FCC commissioner Nicholas Johnson, who explains how mainstream news reporters learn self-censorship when it relates to hard-hitting exposes that run counter to the financial interests of their corporate owners:

“A young reporter writes an expose, but the editor says, ‘I don’t think we’re going to run that.’ The second time the reporter goes to the editor [with an expose], the editor says, ‘I don’t think that’s a good idea.’ She doesn’t research and write the story. The third time the reporter has an idea. But she doesn’t go to the editor. The fourth time she doesn’t get the idea.”

This past month, the Online Review caught up with the busy consumer advocate and discussed his book with him. We also talked about current political and consumer issues.

OR: In your book you discuss how large corporations have taken over so many aspects of our lives, often times restricting our freedoms and liberties, or costing us time and money. Yet there are some Americans who would say that without large corporations, we would not have as high a standard of living or the choices for consumer goods that are available today. How would you answer that?

JC: There is a lot of truth to the fact that corporations give us tremendous commercial conveniences, and there is no question that there is an appropriate role for large corporations to compete in our economy, and I’m all for that. I just want them to compete better. The problem occurs when a corporation becomes so much of an economic powerhouse that it exceeds its boundaries and works against the public commercially. In addition, corporations often step into our cultural sphere and change our mores and rules of law. For example, when corporations trade our personal financial or medical information without our consent, that’s showing cultural disrespect for our privacy. What my book strives to do is show that in the last 25 years- what I call the age of the corporateer- large corporations have aggressively marketed to our children, gone after our privacy, and tried to change our rule of law by usurping individuals’ legal rights.

OR: Would you say that large corporations acted more responsibly in the past?

JC: My contention is that until the 1970s, large corporations really adhered to a stakeholder view where community and labor and nation were co-equals. Then something went awry, and I attempt to chart that phenomenon in my book.

OR: In the 1950s, they used to say, ‘What’s good for General Motors is good for the USA.’ In those days I suppose that saying had some validity, but today…

JC: Well, when companies like General Motors became transnational corporations, they forgot they had certain responsibilities to the community and put commercial concerns over everything else. That’s when things went awry. For example, when Ford thought it was more important not to tell people about a fatal flaw in the gas tank because it was going to cost them too much money, that’s when they overstepped their bounds and began mucking up the culture. And it’s very hard for most people to think of corporations as institutions, but they are. They have institutional memories, institutional strategies, and institutional assumptions that affect America very deeply.

OR: Is it an exaggeration to say that in some ways they have become the new gods of our modern culture?

JC: I think to many, corporateering has become a religion. And that’s why you heard Ken Lay at the height of the California energy crisis saying, I believe in God and the free market, and the problems in California were created by too much regulation, not too little. In fact, you could see the religious fervor among many of the big CEOs in the nineties, and that was a sure sign that the bubble was going to burst. Not just the economic bubble, but also the bubble of arrogance and hubris in the executive ranks.

OR: You mention how corporations use think tanks in America to get their message across to the American people, and you write that there are over 1,000 of them in America. I don’t think most Americans are aware of the power of conservative think tanks like the Cato Institute or the Heritage Foundation. Explain the process of how large corporations use these types of think tanks to influence public opinion.

JC: These think tanks are the oracles for movements like less regulation, fewer rights for individuals, and less corporate accountability. They are funded primarily by Fortune 500 companies, and they are the intellectual backing for economic ideas that are questionable. My experience is that these think tanks are there to prove their point, and their mission is to show how government’s intrusion into a corporation’s business, or any type of government regulation of a corporation, is not appropriate.

OR: You also point out that large corporations have so many loopholes today that they only pay about 8% of all the taxes collected by the IRS. Back in the 1950s, they paid about 28% of the total tax load. And so today average citizens make up the 20% difference. Yet some Americans give corporations a pass on this point, saying, well, if we place more taxes on corporations, they’ll only pass the cost on to consumers. Or they say that consumers are also shareholders in companies, so it benefits them for corporations to avoid paying higher taxes. How do you respond to this?

JC: I think the idea that this is being done for the benefit of shareholders is wrong. The people who benefit when corporations do really well are, first, the top management, who are often the biggest shareholders. Society and individuals who can least afford it are actually the ones who lose out when individuals don’t pay their fair share of taxes. And there are many tax loopholes on the books written for corporations that never get removed because politicians get a lot of money from corporations. So, as state governments start to see a shrinking of their resources, we’re going to see more pressure to tax corporations. I think this was inevitable. In addition, as a result of the backlash to scandals like Enron and Tyco and Worldcom, more people believe there is a need to rethink the corporate tax structure and its fundamental lack of fairness. In fact, in California we are trying to get an initiative on the ballot in November to charge corporations higher rates for commercial properties they own.

OR: This ties in with another point you make in your book about how corporations waste an individual’s time, like when you spend 20-30 minutes on the phone just to get through an automated menu to fix a problem with a telephone bill.

JC: Time value, I think, is the future. The ‘Do Not Call List’ is a good example, because what we need to do is start charging these companies for wasting our time. And I think there needs to be a standard for whenever a company excessively wastes our time, there is a mechanism that clicks in to recover money for that time.

OR: Could you put something like that on the ballot in California?

JC: We’re thinking about it.

OR: Speaking of California, how do you think Arnold Schwarzennegger is doing as governor?

JC: Well, so far I’ve counted more than a dozen broken promises that he made, so he hasn’t been doing too well if you judge him by keeping his word. Actually, Schwarzennegger is a quintessential example of a corporateer. Here’s a guy who is a businessman who understands the power of branding, and during the election he put out a very verifiable promise to clean house and stop taking money from special interests. In essence, it was like him saying, ‘100% satisfaction guaranteed!’ You can’t prove it, of course, but no one would believe that you would lie about it, so you say it over and over until people assume that it’s true.

OR: But why are Americans so gullible? And why can’t third party populist candidates like Peter Camejo, who ran for governor in the last California election (and actually participated in the debates and got some decent coverage), or Ralph Nader, who ran for president against Bush and Gore, ever get more than a few percentage points of the popular vote?

JC: The public doesn’t want to bet on someone who’s not going to win. You know, we live in a sports culture (laughs). I think that corporations have influenced not only our political life and our politicians, but they have also convinced Americans that it’s important to be with a winning brand. And if your brand isn’t the best, why bother.

OR: What about health care? Will it be possible to get a single payer, national health care bill passed in the United States if a Democrat wins the next presidential election?

JC: I think it has to happen in a state before it happens nationally. There are just so many vested interests involved- from pharmaceutical companies to insurance companies to doctors- who just don’t want to go that route because they don’t want their fees and prices limited. I think we’re more likely to move toward a public utility type health care system where there are much greater price and costs controls, and if companies do not want to play by the rules, we’ll have to take the next step.

OR: Is your group going to propose something like that in the near future in California?

JC: We’ve been having some dialogues with stakeholders in California, and I think they are ready for the public utility model in health care, especially because there is now a mandate for employer health care coverage by 2006. So unless the mandate is undone, we need to make that system affordable. And the only way to make that system affordable is to look at where all the money is going in the system. I mean right now know one knows where all the money goes. And it seems to be common sense to find that money and watch it.

OR: Now here comes a very tough question: Given the fact that transnational corporations buy and sell politicians to promote their agendas; given that these companies control a majority of the major media; and given that many Americans have become so inured to the corporate culture that many of them actually prefer it, how can we stop what you call “corporateering?”

JC: One word at a time, one conversation at a time. Each individual must find his own personal power to do it. One person actually can do an amazing amount. In my experience, not too many people fight back. But when someone does fight back and is successful, it resonates.

OR: My last question: What does your organization, The Foundation for Taxpayer and Consumer Rights, have planned for the next year?

JC: We’re going to be fighting for health care premium regulation and bulk purchasing of drugs in California. We also have some bad ballot initiatives that we need to stop where corporations are attempting to take away our legal rights. In addition, we’re working on the zip code-based auto rate issue, which we hope to do by the end of the year. We have many fights ahead of us, and we’re going to try to implement a lot of what my book recommends.

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