"Don't Blame the Company"

If, as Noam Chomsky argues, the conservative thought-controlling nature of the corporate media is best seen in its “leftmost” or most liberal creations, then Time magazine's recent four-part exposé on corporate welfare give us an especially good look at the boundaries of acceptable opinion. This hard-hitting Fall 1998 series found that more than a year after the federal government ended individuals' entitlement to public cash assistance, American corporations received $125 billion a year in federal subsidies, grants, tax breaks, exemptions, credits, low-interest loans, and services, and an incalculable amount of comparable public assistance at state and local levels. The series attacks the conventional corporate and political wisdom that such government assistance to corporations creates employment opportunities for working Americans. Fortune 500 companies, the biggest beneficiaries of this corporate welfare, “have,” according to Time, “erased more jobs than they created this decade.” America's massive public handout to big business, Time argues, produces not jobs for the many but profits for the prosperous few.

As surprising, perhaps, as the series itself is its authorship by the prize-winning investigative reporters Donald Barlett and James Steele. Barlett and Steele have solid credentials as modern day muckrakers—middle-class populists with sharp eyes for class injustice and the distortion of government policy by and for the rich. Their recent books, including the best-seller America: What Went Wrong? (1992), construct relentless case-by-case indictments of “how the rule-makers in Washington and the deal-makers on Wall Street” have rigged government to “favor the privileged, the powerful, and the influential—at the expense of everybody else.” In the Time series, as in previous publications, their work is punctuated by sharply drawn contrasts between the difficult experience of working people and luxurious lives of America's prosperous “elite.”

“The Real Villains”

Still, for all its seemingly anti-corporate bluster, and despite the progressive imprimatur of its authors, the series insists on an argument straight from the heart of corporate hegemony in a neoliberal age who's respectable intelligentsia routinely conflates democracy with the rule of the market: the real cause of corporate welfare's obscene waste of taxpayer money is government. In a carefully worded preface, Time's editor-in-chief and former Wall Street Journal managing editor Norman Pearlstine defends the articles against the horrible possibility that “some may call this series anti-business” by noting that their authors blame corporate welfare on government officials—the “real villains” for Pearlstine. What about the mendacious behavior of the companies? “I don't view them as villains,” says Pearlstine. “Business enterprises like General Motors are designed to make money. They would be derelict if they didn't seek to avoid taxes and gain special subsidies.” Barlett and Steele's comment on corporations' willingness to take money from states is consistent with Pearlstine's caveat: “Why not? Corporate executives, after all, have a fiduciary duty to squeeze every dollar they can from every locality waving blandishments in their face.” They conclude their first series installment by quoting with approval Ohio State Senator Charles Horn, a critic of tax abatements for corporations: “We know companies are manipulative but it's the nature of business to go after every dollar that's legally available. Don't place the blame on the company; place the blame on government. This is government's folly.”

This perspective on corporate mendacity is legally accurate but well to the right, morally speaking, of the 18th-century Scottish political economist and current neoliberal icon Adam Smith, who—as Chomsky has repeatedly shown—wrote similar things about the selfish conduct of big businesspeople but condemned that behavior as an expression of what he called the “vile maxim of the masters: all for ourselves and nothing for other people.” It excuses and downplays Time's own findings that corporations do considerably more than respond to the windfall of government blandishments—they construct their own advance corporate welfare “shopping lists” and make their needs known to the relevant jurisdictions.

It also places the deeper issue of why corporations can deploy so much power in the first place beyond the realm of acceptable discussion. Who, Time asks, can blame corporations, whose existence and selfish conduct it sees as immutable facts of life, for raping taxpayers to the full extent allowed by the law? But serious consideration of basic structural factors would show that the question should be turned around. Who, in a world of centralized corporate ownership, significant real and potential capital mobility, stagnating wages, insufficient job creation, super-parcelized political sovereignty, and money- driven politics, can blame American public officials for granting special favors to large corporations? Time correctly notes the social inefficiency and injustice that results when states, cities, and nations bid against each other to reward corporations for constructing facilities that market forces already require the private sector to build. But American government officials are not part of some farsighted and benevolent national-managerial class seeking the best possible allocation of material and human resources for the country as a whole. They are jurisdiction-bound political operatives whose tenure in office requires votes and Big Money contributions to pay for campaigns so expensive that they effectively rule out nonwealthy candidates with anti-business perspectives. Their claim to these essential political commodities relies to no small extent on their ability to credibly claim that they are preserving and creating jobs (especially “good jobs” with big firms) within their jurisdictions, and this claim relies largely on their service to Big Business. They are tails being wagged by the corporate dog.

Ignoring State Capitalism

The Time series obscures another issue too radical for serious debate in the mainstream media. As with much liberal and even left discussion of corporate welfare, Barlett and Steele's discovery and denunciation of various specific and recent deals between public officials and private corporations diverts attention from the more pervasive, systemic, and indispensable (for investors) ways government supports corporations on both a long-term and a daily basis. Numerous key and corporate-dominated industries including auto, aerospace, steel, semiconductors, telecommunications, electronics, modern agriculture, finance, and energy are and have long been significantly socialized.

Since World War II, of course, the single biggest source of state subsidy for the U.S. corporate sector has been the Pentagon, which receives no explicit treatment in Barlett and Steele's Time series. It continues in this role despite the collapse of the once seemingly indispensable Cold War enemy—for good reason. Without the Defense Department's legendarily anti-competitive and waste- and fraud-ridden network of profit-guaranteeing “cost-plus” contracts, U.S. capitalism as we know it would go the way of the recently murdered Aid for Families with Dependent Children (AFDC) program, whose 1996 dismantlement Barlett and Steele see as the result of “compelling” criticism: AFDC “was unfair, destroyed incentive, perpetuated dependence, and distorted the economy.” Much the same could far more accurately and significantly be said of the Pentagon system and, indeed, of corporation capitalism—state capitalism, if you prefer—but you'll never read that in Time.

Trashing the Welfare State

The Time series is premised, finally, on conservative myths about welfare for the poor. Barlett and Steele rightly expose the hypocrisy of businesspeople whose firms receive government assistance but who, in a sterling example of the “vile maxim,” advocate cutting the safety net for the U.S.'s considerable number of impoverished citizens. It is disheartening, however, to see our “heroic” journalists make this point by advancing the vicious and largely discredited idea that AFDC created generational welfare dependency and poverty and by accepting the ludicrous notion that the punitive, miserly, and controlling AFDC system “rewarded the poor.” Now that government has ended the poor's entitlement to the “reward” of cash assistance, they argue, it should also subject corporate America to the alternately harsh and liberating logic of the invisible hand of the market. Beneath this seemingly liberal line of reasoning lurks the classically conservative (now called neoliberal) and fraudulent assumption that things will turn out fine if we just let the “free market,” not the “folly” of government, determine life chances. Lost in this approach is the apparently obsolete left and (modern but pre-neo-) liberal knowledge that market forces are almost never egalitarian in either opportunity or outcome and that equality of condition, not merely opportunity, is the true goal of democratic social policy. When, it might well be asked, have large businesses ever prospered and “delivered the goods” without widespread government intervention on their behalf?

Also missing is an appropriate sense of relative public expenditure. In 1996, the year of its elimination, AFDC cost U.S. taxpayers $18 billion, less than 1 percent of the federal budget's discretionary spending and equal to just 4 percent of the $448 billion the federal government spent on what journalists Mark Zepezauer and Arthur Naiman call “wealthfare—the money we hand out to corporations and wealthy individuals.” Federal subsidies to the U.S. agribusiness sector alone equaled the amount spent on cash assistance for the poor.

To “Venerate the Economic System”

Of course, the corporate interests who provide Time's advertising revenues cannot be expected to grasp the conservatism beneath the outwardly liberal, anti-business tone of Barlett and Steele's exposé. The officers of America's authoritarian corporations raise the plaintive cry of “class warfare” at even the slightest mention of social inequality and corporate responsibility. Concerned, no doubt, with the low public esteem in which corporations are held (a 1996 Business Week survey that startled its sponsors, 95 percent of Americans think corporations should cut their profits for the good of workers and communities), corporate America is sure to zero in on the Time exposé's seemingly anti-capitalist message, leaving discovery of the series' deeper conservative essence to hopelessly alienate radicals of the lunatic fringe. Interesting, in that context, is Time's first issue following the four-part Barlett and Steele bombshell. Reenacting the 1920's “return to normalcy” after the social protest, labor militancy, and Left activism of the Progressive and World War I eras, when large numbers of true muckraker journalists and others questioned the still youthful corporation system in substantive fashion, Time offers its corporate comrades a conciliatory “special issue” on the “Builders and Titans of the 20th Century.” It's all about those heroic, risk-taking capitalists who made America great, like Nazi sympathizer and labor exploiter par excellence Henry Ford, without whom—according to Time's guest biographer, the noted business historian Lee Iacocca—“America wouldn't have a middle class today,” and whose corporate progeny will soon face a class-action lawsuit for profiting from the Holocaust. Time's Hall of corporate Fame includes world's richest human and the modern day monopolist Bill Gates, whose current unpopularity is “unfair” since “in certain ways his career is distinguished by decency.” The special issue hails Sam Walton for his supposedly worker-“empowering management techniques” but fails to mention that notoriously low wages and related antiunion tactics are an integral part of Wal-Mart's labor policy as fashioned by its late founder.

The “Builders and Titans” issue includes corporate apparatchik Pearlstine's nomination of General Electric as the “company of the century” in a paragraph that manages to discuss that firm's remarkable rise to power (its current capitalization is $32 billion) without mentioning its status as the world's largest defense contractor.

Consistent with the requirements of corporate media liberalism, which hold that the most effective defense of existing class and power relations incorporates (albeit superficially) some left language and analysis, the special issue tweaks corporate leaders past and present for too commonly being “simplistic,” “uninformed,” and “authoritarian” when “discussing society's broader issues” and setting company policies. “We must recognize,” Time further acknowledges, “that markets are messy—frequently overshooting or undershooting desired targets—and that it is ordinary working people, not investors, bankers, and business leaders who suffer most when they do.” Still, in the last analysis, Pearlstine claims that Time has good reasons to “venerate business leaders and the economic system that allows them to flourish.” “If the twentieth century was, as [Time founder Henry] Luce said, ‘the American Century,' it was,” he gushes, “largely because our system, espousing freedom of the markets and freedom of the individual, rewarding talent instead of class and pedigree, bred a group of leaders whose single-minded fixation on getting rich—and creating great products along the way—led to unheard of levels of productivity and prosperity.” There's not much room in that formulation for the significant extent to which modern U.S. capitalists and their corporations have depended on regular state protection or for the limits of “individual freedom” experienced by the tens of millions of Americans whose lack of economic resources and market power restrict them to working-class status. There's no sense of the negative social and environmental impacts of the system's products and services.

Strange as it may seem, Time's series on the “folly” of corporate welfare may be more reactionary in effect than the most nakedly pro-corporate and anti-government/anti-worker/anti-environment tirade on the Neanderthal editorial page Pearlstine once supervised for the Wall Street Journal. It's not just that the series is riddled by core conservative and capitalist messages. By containing those messages in seemingly populist prose—in language that partly acknowledges difficulties in the operation of the dominant political-economic system while denying readers a critical sense of that system's underlying structural and historical essence—the series marginalizes serious criticism of modern state capitalism in ways that more transparently pro-corporate propaganda would not. It also reinforces the illusory sense that significant, democratic, and wide-ranging ideological and policy debate occurs within the propagandistic, narrow-minded, and thought-controlling realm of the corporate media. In this, as in other examples, the real triumph of modern media conservatism is ironically found in the media's most liberal and “leftmost” productions.                                 Z

Paul Street is a research associate and adjunct history instructor at Northern Illinois University. His articles have appeared in Dissent, Monthly Review, Journal of Social History, and Mid-America.