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Nader writes: "Large corporate capitalism is a breed apart from smaller scale capitalism. The former can often avoid marketplace verdicts through corporate welfare, strip owner-shareholders of power over the top company bosses and offload the cost of their pollution, tax escapes and other 'externalities' onto the backs of innocent people."

Consumer advocate Ralph Nader. (photo: Meet the Press)
Consumer advocate Ralph Nader. (photo: Meet the Press)


The Myths of Big Corporate Capitalism

By Ralph Nader, The Nader Page

13 July 14

 

arge corporate capitalism is a breed apart from smaller scale capitalism. The former can often avoid marketplace verdicts through corporate welfare, strip owner-shareholders of power over the top company bosses and offload the cost of their pollution, tax escapes and other “externalities” onto the backs of innocent people.

Always evolving to evade the theoretically touted disciplines of market competition, efficiency and productivity, corporate capitalism has been an innovative machine for oppression.

Take productive use of capital and its corollary that government wastes money. Apple Inc. is spending $130 billion of its retained profits on a capital return program, $90 billion of which it will use to repurchase its own stock through 2015. Apple executives do this to avoid paying dividends to shareholders and instead strive to prop up the stock price and the value of the bosses’ lucrative stock options. The problem is that the surveys about the impact of stock buybacks show they often do nothing or very little to increase shareholder value over the long run. But they do take money away from research and development. And consumer prices rarely, if ever, drop because of stock buybacks.

Apple’s recent iPhone is produced by 300,000 low-paid Chinese workers employed by the Foxconn Technology Group. They are lucky to be paid $2 per hour for their long work weeks. It would take $5.2 billion a year to pay these Chinese iPhone workers about $10 per hour.

If the $130 billion from Apple’s capital return program was put into a foundation, it could pay out, at 4% interest, $5.2 billion year after year. Compare $130 billion of “dead money” to the $1 billion in “live money” Tesla Motors has spent on research and development to produce its revolutionary electric cars.

Forget marketplace competition when it comes to the abuse of the monopoly patent system for medicines, steeped in taxpayer-funded basic research, and its obsolete rationale for encouraging innovation. Welcome to the $1,000 pill – yes the price of Gilead Sciences latest drug, Sovaldi, which is used to treat hepatitis C, a liver-destroying virus. It is said to have fewer side effects and a higher cure rate than its counterparts. Taken daily at a cost of $1,000 a pill, the twelve-week treatment that is recommended for most patients costs $84,000 and a twenty-four week course of treatment for the hard-to-treat strain costs or $168,000.

Use of this drug is beginning to break the budgets of the insurance company payers. Representatives from Doctors Without Borders has said that a twelve-week course of treatment should cost no more than $500. Gilead did not sweat out the research and development of this drug. Gilead simply bought Pharmasset – the company with the patent on this drug. Not surprisingly, Gilead stock has surged upward, oblivious to surging public criticism.

Some overseas countries are not so submissive to the “pay or die” corporate edict. The nonprofit group I-MAK (Initiative for Medicines, Access and Knowledge) has filed a challenge to the patent, claiming that Sovaldi is based on “old science” with “a known compound,” thereby not meeting India’s stringent requirements for patentability.

Additionally, economist Jamie Love has developed an alternative to such “pay or die” patent monopoly prices while keeping rewards for true innovations (http://www.keionline.org/).

Another example of corporate greed and waste is the astounding story of the White House trying to procure the replacement of is aging presidential helicopter fleet, which further undermines the myth that big corporations are more efficient than government. Under the George W. Bush administration, the Navy put in an order for 23 new helicopters from AgustaWestland, working with Bell Helicopter and Lockheed Martin. The price in 2005 was to be $4.2 billion. Three years later the price of the contract zoomed to $11.2 billion or $400 million per helicopter (about the price of an Air Force One 747).

Congress’s Government Accountability Office (GAO) and the Air Force criticized the contractors and their subcontracting practices. As is usual, Lockheed complained that the cost overruns were due to government modifications.

In June 2009, the Navy terminated the contract after spending $4.4 billion and taking delivery of only nine of these (VH-71) helicopters. By December 2009, the White House and the Department of Defense officials washed their hands of this debacle. By that time, the projected cost had risen to $13 billion. In total, the bungled enterprise wasted $3.2 billion and this presidential procurement effort has to start all over again.

By comparison, $3.2 billion is greater than the combined budgets of Americorps, Public Broadcasting, public housing (Choice Neighborhoods), the Arts (NEA), the Humanities (NEH), the Peace Corps and the worker safety programs of OSHA.

Imagine if there was similar squandering of those budgets: there would be indignation roaring from Congress! When it comes to the defense industry, well that’s just business as usual, complete with the golden handshakes with the Pentagon for the almost certain cost over-runs.

Big corporations should not be allowed the myths of competitive, productive, efficient capitalism – unless they can prove it.


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+22 # anarchteacher 2014-07-13 14:48
We must immediately dismantle the corporatocracy root and branch, the egregious corporate welfare-warfare state with it domestic regime of militaristic fascism and its hegemonic overseas empire of over 900 bases circling the planet.

We should begin with that 100 year old incubus which enables this all, the Federal Reserve.

This should be the grass-roots populist issue uniting progressives and libertarians, from Ralph Nader, Bernie Sanders and Elizabeth Warren, to Ron Paul, Lew Rockwell, and David Stockman.

We must attack the blind arrogance and hubris toward “skulking peasants” which has been an eternal constant, whether it was the British government towards the American colonists in 1775; the British government towards the Indian sepoys in 1857; the American government towards the indigenous Indian peoples of North America from 1775 to 1890; the American government towards the Filipinos in 1899; the American government’s Banana Wars against Latino peasants; the British Amritsar Massacre of Indians in 1919; the American government towards the Vietnamese from 1955 to 1975; the American government towards the Afghans in 2001; the American government towards the Iraqis in 2003; or the American government's disdain towards the American people in 2014.

Corporatism is the enemy. Let "End the Fed" resound from coast to coast, in every city, town and precinct.
 
 
+7 # wrknight 2014-07-13 17:36
Nobody is going dismantle the corporatocracy or get rid of anything or anybody until American voters get their act together and get rid of the parasites in Congress -- ALL OF THEM! NO EXCEPTIONS! So take your complaints to the voting booth.
 
 
+18 # NAVYVET 2014-07-13 18:57
ALL of them?? That's silly. I can think of a few exceptions--not many, but a few. So can most of us, I'm sure.

You sound like a Nihilist. Or perhaps you plan to run the government entirely by yourself without experience? Like the noises made by the British "back benchers" in 18th-19th century Parliaments who complained incessantly until they brought the government down--then, when given power to do something, kept on kvetching and did nothing worthwhile! The Tea Party whiners are our equivalent of the back benchers.
 
 
+9 # BluePill 2014-07-13 20:58
Exactly NavyVet. The responders in these forums always complain that we have to do something. But What? Voting is of course the solution, but how do we motivate the majority of citizens, who feel the same way as RSN supporters, to use their power to change this corrupt system? Maybe if we look at Germany and their system, a large third party with a strong socialist ideology would be a force that the two major parties would have to bargain.
 
 
+6 # Radscal 2014-07-14 00:46
Having volunteered for voter registration drives and "get out the vote" phone banks, my experience is that most who don't vote make that choice because they know the candidates don't represent them.

It's that endless chicken or egg conundrum. To get people motivated, we need progressive candidate, but to get progressive candidates, we need masses of motivated voters.

We already have a very progressive 3rd party in the Greens (who hold many elected positions in Germany). Perhaps, we could convince enough of the liberals who have been scared away from voting their conscience to stop voting for "lesser evils," and get enough Green votes to convince the self-disenfranc hised that we have a chance of winning.
 
 
+2 # RONin2016 2014-07-14 12:35
RESTRUCTURE THE FED! Not end it!

It is privately owned by the banksters since set up n 1913 - Now we buy them out at original cost of their stock on a 30 year loan @ 6% - the same yield rate mandated as a dividend in law on their stock.

We still need a central bank but with a monetary system not based on debt but on savings - backed by sound collateral.

Who buys it at cost from the banksters? THE SOCIAL SECURITY SYSTEM - and make it a subsidiary and rename it as "THE PEOPLES' BANK OF AMERICA" so all profit go to increase retirement and disability and survivor benefits to Americans!
 
 
+9 # reiverpacific 2014-07-13 15:58
@ "anarchteacher".
Absolutely -and then some!!
But how?
"We must immediately--": if only that were possible but you are increasingly dealing with an apathetic, seldom-voting, fearful, angry and fragmented populace perfectly happy with ever-lowered expectations, "Panem et Circences" and even fewer opportunities for their spawn as public education is whittled down and even if they make it to college, their options seem to be the military or corporate worlds who are interlinked, demand utter conformity as well as blind, unquestioning uniformity of thought and action.
I remember well when free-thinking and creative enterprise was accepted and encouraged in this country on my initial visit and subsequent spells working and living here -and I did really well out of it myself as a bit of a free-ranging entrepreneurial opportunist- but I've also seen the decline if not yet the fall of this particular Empire since, if I must put a timeline on it, the Reagan years when so many were suckered by his B-movie acting "Aw-shucks" persona cloaking a ruthless, anti-populist, anti-environmen t and shady ignoramus-natio nalist fink up to all kinds of dirty tricks in different countries and after total grassroots subjugation at home.
You have it right; it's just a realistic solution we seek together -if we survive much longer as a seemingly suicidal species with common-sense becoming a scarce characteristic of government, organizations and individuals.
"Externalities" is a new one on me.
 
 
+3 # anarchteacher 2014-07-13 17:45
Carefully read Ralph Nader's Unstoppable: The Emerging Left-Right Alliance to Dismantle the Corporate State, and Ron Paul's End the Fed, for background intellectual ammunition on decentralized grass-roots resistance organization guided by cadre.

What I have in mind is a grand trans partisan coalition of united but disparate elements such as the non-interventio nist America First committee:

http://www.antiwar.com/justin/j082302.html
 
 
-8 # MidwestTom 2014-07-13 16:45
A recent poll of small businesses b Bloomberg reported that the owners hate government paperwork more than taxes. It has also been reported in several places lately that small business creations are declining due mainly to the need to comply with too many regulations.

As part owner in a business I can tell you first hand that more than once I have been told by some upper 20's white hatted government field agent, that he had the power to immediately close down our business and fine us $10,000 per day. None of these occurrence were life threatening or even related to potential injury, all were over some missed filing, or ,minor environmental violation.
 
 
+16 # wrknight 2014-07-13 18:19
No, no, no! That's bull. Everyone hates paperwork, but that's irrelevant. No sane person abandons a successful business because of paperwork. Small businesses are declining because they don't have enough customers; and they don't have enough customers because too many people are living on or below the poverty line. It's simple -- too few customers, your business goes under. Increasing business failures discourages entrepreneurs so there are fewer new business startups. To make matters worse, the few that get big enough to be visible on the corporate radar are soon bought up by the megacorps. The net result is a decline in small businesses.
 
 
-6 # BluePill 2014-07-13 21:20
you have absolutely no idea what you are talking about. There are plenty of customers for small businesses. If you are involved in an industrial business, the Local, State and federal regulation compliance results in high fees to the customer. If a contractor in an industrial field is not charging high fees, he is most likely non-compliant and these are the companies that we need to fear.

If you are a small business direct to consumer, you need the support of local government to help you succeed, not work to find any little violation to shut you down. Localities and states that understand that government regulation can be used to help the small business owner succeed obviously have thriving local businesses.

For many entrepreneurs the dream is to build up the business to the point that the large corporations buy them out.
 
 
+2 # RLF 2014-07-14 05:55
All of the silly paper work is because it works for big Corps. that have leagues of lawyers to take care of it all and it is a useful way for the biggies to keep small business (that they never could compete with!) from successfully competing.

Bottom line...you're both right...the regulation is necessary and it needs to be streamlined.
 
 
-2 # BluePill 2014-07-13 21:08
I guess the people who are giving you the thumbs down have never owned their own business.It's ironic they feel this way since it is small businesses that save big city neighborhoods & small towns. It's the huge military/indust rial corps. that are destroying this world.I forgive the academics who give you a thumbs down since they don't have a clue what goes on in the real world.
 
 
+9 # Radscal 2014-07-14 00:54
I didn't bother to thumbs down someone who quotes Bloomberg and rails on about regulations as the problem with economic recovery and growth. I was a small business owner for most of my adult life, and of course dealing with regulations is a hassle. But if a business has customers, then the owners/managers can manage regulations. They're just part of the cost of doing business.

Henry Ford understood that the key to successful businesses is workers who make enough to be consumers. With wages stagnate or declining, fewer businesses can thrive.
 
 
+15 # fredboy 2014-07-13 17:05
You nailed it.
Big corporate capitalism is the ultimate shill game, boosted by government--han g on--welfare, aka the bailout.
By the way, you nailed GM with "Unsafe at Any Speed" decades ago. And just look at the nightmares they passed on to the public during the past decade. They never learn, Ralph.
 
 
+4 # Radscal 2014-07-14 00:56
How much better off we'd be if we'd elected Ralph in '96 or '00.
 
 
+13 # PeacefulGarden 2014-07-13 17:12
I love you Ralph! Keep fighting hard! And, again, I must apologize for the apathy of millions of American citizens.

And, shesh, the $1,000.00 patented pill is an excellent of example biggest problem we face; those who lay claim to owning the complete profit rights to a substance, song, story, poem, or service are setting a social pathology that may take decades to undo.

My father always told me, "you cannot own anything!". All else is indeed a myth.
 
 
+7 # pwehrle 2014-07-13 20:30
Pigs abound and fly..there is no limit to pharmaceutical company greed..because they can...it is the American way..because we all sit by and buy into the bullshit they put out...we end up with the product...when the colchicine price went from 5 cents a pill to 5 dollars a pill it was the same product..no scientific reason, but totally related to the profiteering greedsters...th is country is in deep shit....and most Americans are sound asleep.....we need to awaken the sheep before it is too late
 
 
-13 # perkinsej 2014-07-13 19:37
Large multinational firms do business in 50 or more countries. Trying to determine exactly in which nation state they earn a certian proportion of their oveall profits is an impossible task. I am with the conservatives on this one. Eliminate all corporate taxes, but raise to the roof the taxes on U.S. households. We know where they reside.
 
 
+3 # Radscal 2014-07-14 00:58
If a multi-national corporation doesn't know where it's revenues and profits originate, then taxes aren't their main problem.
 
 
+2 # pwehrle 2014-07-13 20:20
I have simply given up..unless I can start blowing things up without impunity....and my dearest dream...wrap my hands around W's neck and not have to go to the gas chamber....wimp yes...patriot yes...we are doomed and the more intelligent ones amongst us know it... the Rethugs, Faux Noisers and the rest of the right wing shills will surely led us into oblivion.....Al
 
 
0 # LAellie33 2014-07-26 23:59
If Corporations are people then throw the entire corporation in prison for tax evasion, and the ultimate in greed
 

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