April 3, 2017
Like it or not, Trump with his close association with America’s business, both on his personal wealth & business, and also his governing of America with a cabinet dominated by business elite people, has bought “Corporatocracy” to America. Senior Trump adviser Jared Kushner declared in an interview last weekend at his West Wing office: “We should have excellence in government. … The government should be run like a great American company. Our hope is that we can achieve successes and efficiencies for our customers, who are the citizens.” Even in 2012, during his presidential campaign, Mitt Romney said he’d like a provision in in the Constitution to “say that the president has to spend at least three years working in business before he could become president of the United States.”
“The government should be run as well as a great American company, but that’s profoundly different from saying it should be run like a great American company — those are two completely different things. The first and most obvious problem with that is that American citizens are not customers. Someone has to tell Jared Kushner that citizens are his boss, not his customers. When you’ve inherited your job, that might be difficult to understand, but it’s an important idea. More broadly, we can separate this into two different things. One is the broader idea of what’s the relationship between being good at business and good at government, and the second is the specifics of what the Trump administration is trying to do. As to the first question, it’s worth nothing that until Donald Trump, there had never been a president without any political experience.”
Corporatocracy is a recent term used to refer to an economic and political system controlled by corporations or corporate interests. It is most often used today as a term to describe the current economic situation in a particular country, especially the United States. This is different from corporatism, which is the organisation of society into groups with common interests. Corporatocracy as a term is often used by observers across the political spectrum.
Economist Jeffrey Sachs described the United States as a corporatocracy in The Price of Civilization(2011). He suggested that it arose from four trends: weak national parties and strong political representation of individual districts, the large U.S. military establishment after World War II, big corporate money financing election campaigns, and globalization tilting the balance away from workers.
This collective is what author C Wright Mills in 1956 called the ‘power elite‘, wealthy individuals who hold prominent positions in corporatocracies. They control the process of determining a society’s economic and political policies. The concept has been used in explanations of bank bailouts, excessive pay for CEOs, as well as complaints such as the exploitation of national treasuries, people, and natural resources. It has been used by critics of globalization,sometimes in conjunction with criticism of the World Bank or unfair lending practices, as well as criticism of “free trade agreements“.
Harvard Business Review author:
“The U.S. cannot be run like a business”
Harvard Business Review (source) has a report by Henry Mintzberg, the Cleghorn Professor of Management Studies at the Desautels Faculty of Management at the University of McGill (He is the author of, most recently, Rebalancing Society: Radical Renewal Beyond Left, Right, and Center) on how the U.S. cannot be run like a business.
The article follows:
Donald Trump ran his campaign with the promise to manage the U.S. government like a business. In fact, he just announced that his son-in-law, Jared Kushner, will head up a “SWAT team” dedicated to making this happen.
Trump assumes, as do many Americans, that the country’s major problem is too much government. In my view, the United States is not suffering from too much government so much as from too much business all over the government. This president came into office to challenge “the establishment,” only to ensconce the country’s powerful business establishment in his cabinet, at the expense of Washington’s weaker political establishment.
Should government even be run like a business, let alone by businesspeople? No more than business should be run like a government by civil servants. Each in its own place, thank you. Governments experience all kinds of pressures that cannot be imagined in many enterprises, especially the entrepreneurial kind run by Trump.
Consider this: Business has a convenient bottom line, called “profit,” which can readily be measured. What is the bottom line for terrorism: The number of countries on a list, or of immigrants deported, or of walls built? How about the number of attacks that don’t happen? Many activities are in the public sector precisely because their intricate results are difficult to measure.
Running government like a business has been tried again and again, only to fail again and again. In the 1960s, Robert McNamara introduced the Planning-Programming-Budgeting System as a “one-best-way,” businesslike approach to government. The obsessive measuring led to the infamous body counts of the Vietnam War. Later came new public management, a 1980s euphemism for old corporate managing: Isolate activities, put a manager in charge of each one, and hold them responsible for the measurable results. That might work for the state lottery, but how about foreign relations or education, let alone, dare I say, health care? People in government tell me that new public management is still promoted, though now it might better be called “old public management.”
Then there’s the question of customers. “Our hope is that we can achieve successes and efficiencies for our customers, who are the citizens,” Kushner told the Washington Post, echoing a misguided, overworked metaphor. (When he was vice president, Al Gore also referred to the American people as customers.) As I discussed in my Harvard Business Review article, “Managing Government, Governing Management,” I am not a mere “customer” of my government, buying some service at arm’s length. I am a proud and involved citizen of my country.
Business is essential – in its place. So is government, in its place. The place of business is in the competitive marketplace, to supply us with goods and services. The place of government, aside from protecting us from threats, is to help keep that marketplace competitive and responsible. In Washington, which government in recent years has been fighting vigorously for competition and responsibility?
A healthy society balances the power of respected governments in the public sector with both responsible businesses in the private sector and robust communities in what I call the plural sector — the clubs, religions, community hospitals, foundations, NGOs, and cooperatives with which so many of us engage. The plural sector, although the least recognized of the three, is large and diverse. Many of us may work in businesses and most of us may vote for governments, but all of us live much of our lives in the community associations of the plural sector. (The United States has more cooperative memberships than people.) This is the sector that can offset the destructive effects of the pendulum politics that keep so many countries swinging back and forth between public government controls and private market forces. Especially today, we may well have to rely on this sector to restore the balance that has been lost in the polarized, outdated politics of left versus right.
The most democratic nations in the world get closest to balancing themselves across these three sectors — for example, Canada, Germany, and the countries of Scandinavia. During the decades following World War II, the U.S. was closer to that balance. Recall the era’s prosperity and development, social as well as economic, despite high taxes and generous welfare programs.
Then the Berlin Wall fell. Arguably, it landed on the democracies of the West. That is because we misunderstood what brought it down. Western pundits, reflecting the bias that is now so prominent, claimed that capitalism had triumphed. Not at all. Balance had triumphed. While the communist states of Eastern Europe were utterly out of balance, in favor of their public sectors, the successful countries of the West retained a certain balance across all three sectors.
With this misunderstanding, a narrow form of capitalism has been triumphing ever since, throwing America, along with many other countries, out of balance the other way, in favor of private-sector interests. Seen this way, Trump himself is not the problem so much as an extreme manifestation of the larger problem: imbalance in favor of private interests, with too much business involvement in government.
In the United States, this problem has been developing for a long time. The Republic was barely a quarter-century old when Thomas Jefferson expressed the hope that “we shall…crush in its birth the aristocracy of our monied corporations which dare already to challenge our government to a trial of strength.” In the last century, trustbuster Theodore Roosevelt spoke of the “real and grave evils” of too-powerful corporations, arguing that “it should be as much the aim of those who seek for social betterment to rid the business world of crimes of cunning as to rid the entire body politic of crimes of violence.” A few decades later, Dwight Eisenhower warned that “in the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex.”
A skeptic might say, “If we’ve always been worried about something and it hasn’t happened yet, maybe it’s time to stop worrying.” But, in fact, the risks have been escalating steadily for some time, and they have sharply increased since capitalism’s triumph in the 1990s.
The Supreme Court granted corporations the right to personhood in 1886, and more recently extended that right to the funding of political campaigns — arguably a tipping point in two centuries of shifting toward private sector power in American society. Look around at the scandal of income disparities, at climate change, exacerbated by excessive consumption, and at the unregulated forces of globalization that are undermining the national sovereignty, and thus the democratic institutions, of so many nations. No wonder voters around the world are demanding change, even if some of the consequences are ill-considered. The valid side of their concerns will have to be addressed.
The relationship between business and government, a separation of powers no less vital than that within government itself, has become so confounded that it threatens American democracy itself. When free enterprise in an economy becomes the freedom of enterprises-as-people in a society, to paraphrase Abraham Lincoln, government of the real people, by the real people, and for the real people shall perish from the Earth.
Here are some articles on the subject: