Greed, Inc.: Book Excerpt – Introduction, Chapter one Part 1

© 2012 Wade Rowland


Protests come and protests go. Sometimes, rarely, they morph into the kind of social movement that can change history. When I briefly attended the Occupy Wall St. gathering at Zuccotti Park on lower Manhattan in late October, 2011, there was no way of knowing whether or not it had legs. The Arab Spring was in full bloom, and the Occupy movement, which had quickly spread to scores of cities around the world, took some inspiration from it. But the young people in Tahrir Square in Cairo and in the bloodied streets of Tunis and Benghazi had been playing for keeps, with real bullets and real corpses. And what they were fighting for was as clear as it could be; they wanted to get rid of dictatorships and establish democracy and the rule of law. They wanted a future.

The Occupy movement, like the Global Justice movement that preceded it, had less iconic, less obviously heroic goals. It did, however, share the craving for a future in which an ordinary person could get an even break. A longing for justice and equity was at the heart of its “We are the ninety-nine percent” slogan. The media at first ignored it, then ridiculed it, then lavished attention on it. President Barack Obama expressed some sympathy. Fox News hysterically (in both senses) reported an apocalyptic left-wing conspiracy, “a ‘red army’ of radicals seeking no less than to provoke a new, definitive economic crisis, with their goal being the full collapse of the U.S. financial system, with the ensuing chaos to be rebuilt into a utopian socialist vision.” But no one could figure out exactly what was being demanded, not even, apparently, the protestors.

In Zuccotti Park when I was there a young man who showed signs of sleeping rough for several days carried a placard asking: “Are We Really Going to Let a Bunch of Greedy Selfish Fools Rule This Whole Planet?” A couple of days later, in Toronto, where things tend to be less in-your-face, a trimly-bearded man with leather patches on his sweater sleeves carried a hand-lettered sign that complained: “I was told to expect cake.” But it was another Zuccotti Park sign which best summed up the protest in its early, amorphous days. Scrawled in black marker on what appeared to be a brow paper bag, it read simply: “WTF?”

It was a deft synopsis of the confusion, helplessness, and outrage of the sixty-two million Americans suddenly left with zero or negative net worth following the sub-prime bubble of 2008; the 9.3 million adult workers who were jobless; the 25 percent of teens who couldn’t find work. While they tried to cope, and to keep a roof over their heads, the handful of bankers and hedge fund managers who’d caused the mess were busily socking away billions in government bailouts and “performance” bonuses. In the face of this scandal, government seemed powerless, useless, locked in a corporate-sponsored political cage match in Washington. Things were no better across most of Europe, where protests tended to be even bigger, and more militant. The fury there against banks and other financial institutions was white hot.

Matt Taibbi, who earlier in the year had deliciously described Goldman Sachs as “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money,” worried in Rolling Stone that month that the protest might fizzle if it didn‘t come up with some concrete demands. My own hope was that it might eventually focus on an idea abroad in New York and European capitals, that it was time to take a serious look at the sources of power of the enormous corporations that today rule the world in a very literal sense.

Some speakers were even calling for a law to repeal the privilege of personhood bestowed in suspicious circumstances on corporate America in the nineteenth century, and since then leveraged into near-invincibility worldwide. Banks and other financial corporations were a particular target, and the chant, “End the dictatorship of finance,” was beginning to be heard. Journalist and author Chris Hedges was an eloquent spokesman when mainstream media called on him to explain what was going on. The protestors, he said,

… want to reverse the corporate coup that’s taken place in the United States and rendered the citizenry impotent….Those who are protesting the rise of the corporate state are the true conservatives, who are calling for the restoration of the rule of law. The radicals have seized power and they have trashed all regulation and legal impediments to a reconfiguration of American society into a form of neo-feudalism. And that’s what we’re really asking for—the restoration of the rule of law.

And as Halloween approached, confirmation of the extent of income disparity in the United States was supplied by the Congressional Budget Office in a massive study that showed that while median income of American households had grown by about 40 percent over the past 30 years, the income of the top one percent soared by more than 280 percent. Income among the poorest ten percent had virtually flatlined over that time. The gap between the richest and poorest in the U.S. more closely matches that of Uruguay, Jamaica and many emerging African nations than that of Northern European countries such as Norway and Germany.

The sense among protesters that the corporate power had occupied all the lifeboats as the economy sank was only reinforced by the fact that, at a time when the economy was desperately in need of the stimulus provided by spending, corporate America was sitting on more than US$ 2 trillion in cash thanks to improved profits—cash they refused to spend on expanding plant or hiring workers, and instead doled out in dividends or simply hoarded.

The protestors’ more general suspicion that a small group of very powerful corporations exercise unwarranted influence over human affairs also received authoritative scientific confirmation at about the same time. A team of complex systems analysts at the Swiss Federal Institute of Technology in Zurich published a study that, for the first time, mapped ownership links and power relationships among the world’s transnational corporations. In analyzing the ties that interconnect 43,000 companies, the study was able to identify a tightly knit “super-entity” of fewer than 150 corporations, most of them financial institutions. Together they controlled much of the total wealth in the worldwide corporate network. Prominent among the top fifty most powerful and influential corporations identified were Goldman Sachs, Merryl Lynch, Barclays, Bank of America, Credit Suisse and the rest of the usual suspects from the world of international finance, names being roundly cursed not just in Zuccotti Park, but in Syntagma Square in Athens and St. Paul’s churchyard in London.

This study for the first time provided a non-ideological analysis of what ails capitalism at the global level, demonstrating an inbuilt instability in the system as if has evolved more or less spontaneously over the past few decades. It was, for that reason, groundbreaking. But while it offered important insights into how global capitalism operates, it said nothing about whether such astounding concentration of wealth and power was right or wrong. It missed the moral element of the system and its evolution, an aspect which I believe is crucial to an understanding of issues being raised by critics of corporate greed and power, and to which I have devoted the first several chapters of this book.
If the Occupy critique of the current state of affairs seemed unformed and inarticulate in the autumn of 2011, it was at least in part because we have lost the vocabulary of moral discussion and argument. We have lost confidence in our ability to make moral judgements, and to defend them. The Slovenian philosopher Slavoj Zizek, addressing the Wall St. occupiers in Zuccotti Park, described the situation memorably:

So what are we doing here? Let me tell you a wonderful, old joke from Communist times. A guy was sent from East Germany to work in Siberia. He knew his mail would be read by censors, so he told his friends: “Let’s establish a code. If a letter you get from me is written in blue ink, it is true what I say. If it is written in red ink, it is false.” After a month, his friends get the first letter. Everything is in blue. It says, this letter: “Everything is wonderful here. Stores are full of good food. Movie theatres show good films from the west. Apartments are large and luxurious. The only thing you cannot buy is red ink.” This is how we live. We have all the freedoms we want. But what we are missing is red ink: the language to articulate our non-freedom. The way we are taught to speak about freedom— war on terror and so on—falsifies freedom. And this is what you are doing here. You are giving all of us red ink.

The purpose of this book is to do essentially the same thing.

Part I. How Morality Was Hijacked by Economics
and Why It Matters

“It may be said that the ‘means’ that a man uses are far more important than the ‘ends’ which he pursues, for they express more fully his spirit. If a man strives for freedom by means of tyranny, for love by means of hatred, for brotherhood by means of dissension, for truth by means of falsity, his lofty aim is not likely to make the judgement of him more lenient. I actually believe that a man who worked for the cause of tyranny, hatred, falsity and dissension by means of freedom, love, truthfulness and brotherhood would be the better man of the two.”

Nikolay Berdyaev, The Destiny of Man (1937)

Chapter 1
Pilgrims’ Progress

It might be said of our time, as Alexandre Dumas said of late-eighteenth-century France, that it is the best of times and the worst of times. Liberal democracy is spreading, triumphantly, throughout the world. Technology has revolutionized transportation, communication, access to information. Medical science has extended our lives, and made them less harrowing, thanks in no small measure to those very drug companies that too often seem to put sales before safety. Consumer society affords instant gratification of our every material desire. Progress is on the march.

At the same time there is an undeniable melancholy at the core of it all. Something seems amiss. For one thing, we are making a mess of the planet, in a big way. For another, the eternal goals of justice and equity seem to be receding, and at an accelerating rate. Not just progress, but meanness, obsessive self-interest, a callousness towards others increasingly reflected in our public institutions, seems to be on the march. Mental illness and spiritual malaise are endemic. We can add “moral crisis” to the list of challenges we face.

Social theorists and other commentators routinely identify capitalism as the source of society’s ills. No doubt it is, but where does that get us? How does one alter the foundational precepts of society: how do we reform capitalism? It seems an overwhelming, impossible task.

Winston Churchill, a pragmatist in matters of existential concern, observed that nothing clarifies the mind like being shot at. And so perhaps the fact that the challenges we face have become so terrifying in the scale of the threat they pose to our well-being, they are also, in a sense, uniquely distinguished by opportunity. The very fact that technical solutions seem remote and precarious—some would say unattainable—forces us to think beyond the ease and convenience of the technological fix, and to address the real issues, which are, inevitably, moral in nature. We know well enough how we behave: the evidence is all around us. What we really need to know, and urgently, is why we behave this way. If we can get the morality straight, the rest will follow.

In post-modern Western society, morality is mostly a relativistic affair, contingent on cultural context and individual preference. In contemporary neo-liberal philosophy, this is taken a step farther: morality is always already taken care of by the beneficent workings of the free market. To understand the nature of the modern business corporation it is necessary to have some understanding of this peculiar belief. The modern corporation, with all its power and influence in our lives, is the concrete embodiment of a deliberately designed and constructed moral system whose assumptions undergird market society. That moral system was concocted by Rationalist thinkers and social engineers of an earlier era, whose outlook and attitudes were shaped by the blossoming of modern science in all its youthful vigor and self-confidence. Unfortunately, many of their most basic assumptions—about human nature, about social institutions, about the nature of morality—were wrong. And just as the most elegant bridge will collapse if the engineers get the basic structural parameters wrong, so will the most elegant of social structures.

Rationalism was and is the theory that the exercise of reason is the only valid and reliable source of knowledge. That’s Reason as opposed to philosophical or religious testimony and authority, or spiritual revelation, or instinct and intuition, or even evidence supplied by the senses. Science, as a product of reason and built on mathematics and logic, is thus a superior source of knowledge of the world and the way it works—superior, specifically, to religion, which is a product of revelation, authority and spiritual insight.

Rationalism blossomed at a time when the once-paramount moral and intellectual authority of the Roman Catholic Church had been undermined by scandal and abuses of power, and by challenges from the Protestant reformers. New theories were sought by leading European thinkers to explain the mystery of humanity’s real, if uneven, progress from savagery to civilization. If not Divine guidance, then, what? Reason, it seemed apparent, was the answer. In fact, reason could provide the answer to all questions. Galileo confidently asserted that reason, honed by the methods of science, could teach humankind “what God knows.” Rationalist thinkers set for themselves as a primary goal the working out of a Reason-based, scientific rationale for moral behavior. Their stated intention was to build a moral system rooted not in religious tracts or teachings, but anchored scientifically, in “laws” of human nature and thus more appropriate to a supremely self-assured era that came to look upon itself, in contrast to the earlier Medieval epoch (the Dark Ages, they called it), as supremely enlightened.

(A succinct, contemporary version of the Rationalist ideology was not long ago presented to a journalist by Edward Teller, the father of the hydrogen bomb. Anticipating a question about the moral implications of his advocacy of the H-bomb and work on its development, he repeated three questions he said Werner Heisenberg had asked him when he was the quantum physicist’s student in the ‘twenties: “One: What is good? Two: What is beautiful? Three: What is true?” Without waiting for a response he said, “Each question is best answered if addressed by the appropriate people. What is good is the business of politicians; what is beautiful, of artists; what is true, of scientists. This means that scientists should pursue their research irrespective of whether it’s moral, and politicians should then decide how to apply it.” There is clearly little space for religion or metaphysics as sources of truth in this world view.)

The Rationalist era that produced so many of our important institutions and ideas covers, very roughly, about three centuries from 1600 to 1900. Historians commonly refer to this period in terms of the flourishing of Modernity, by which is meant the transition from feudalism to capitalism, the rise of the secular nation state and of science and industrialism and individualism. Rationalism is only one aspect of Modernity, but it is the defining aspect, the stem from which the branches grow.

The period incorporates what historians call the Scientific Revolution, which begins with Galileo and the philosophers René Descartes and Thomas Hobbes. It includes, as well, the era known as the Enlightenment, which is formally dated from the last decades of the 1600s when Voltaire and Johann Sebastian Bach and George Frederick Handel were born and Louis XIV, the Sun King, was on the throne at Versailles, through to the carnage of the French Revolution of 1789. It is the era of the satirist Jonathan Swift, literary giant Johann Wolfgang von Goethe, the great political philosopher Jean-Jacques Rousseau, the economist and moral philosopher Adam Smith, Jeremy Bentham and the Utilitarian philosophers, the fomenters of the American War of Independence and the drafters of the U.S. constitution. Capt. James Cook sailed around the world, Michael Faraday discovered electromagnetic fields, and James Watt patented his improved steam engine during the period. Rationalism was the supreme intellectual fashion of the time, a straitened, computational Reason, which the French religious philosopher and mathematician Blaise Pascal , a lonely voice in this respect, opposed with his advocacy of the “knowledge of the heart.”
Of course, there were critics. The 1790s brought the Romantic era’s counterattack against the excesses of Rationalism’s sometimes fanatical commitment to reason and logic. The Industrial Revolution was underway and while Rationalists cheered on the engineers and industrialists, Romantics lamented the despoiling of nature and the human toll evident in the era’s widespread social disruption, regimentation, poverty and despair. The English mystical poet William Blake published his Songs of Innocence the year French revolutionaries stormed the Bastille; William Wordsworth and Samuel Taylor Coleridge both published major collections of lyric poetry just a decade later.

But by then the scientific Rationalist ethos had been deeply embedded in Western society, institutionalized, in fact, by the work of the Utilitarian philosophers (of whom, more later) and the great classical theorists of market capitalism. It would receive fresh authority from Darwin’s revolutionary theories on natural selection (first published in 1859) and the new behavioral sciences, and it would dominate the politics and economics of the Victorian era, which spans most of the nineteenth century.

It is sometimes said that the three great “estates” of pre-Modern Medieval society—the Church, the nobility and the commoners have as their parallels in today’s world in our most important secular institutions. The place of the Church has been occupied by the corporation. Market capitalism is our new theology, liberal economic theory is its dogma, and the corporation is the administrative vehicle for spreading the gospel and insisting that dogma and its rituals are observed. It is an appealing analogy, when one considers that capitalism is a system that has as its goal the welfare of humanity, as does the Christian Church. And just like Christianity it has its well-defined views of the role of the individual person within the wider social system, and of what constitutes good and bad behavior.

But, of course, the two ideologies have very different views of the nature of Good, and the ingredients of human welfare, among other things—so much so that it may be more accurate to see the corporation as a kind of anti-Church. Not in the sense of being opposed to the Church, but in being its converse, as a mirror image is to the object it reflects. Certainly market capitalism, as theology, is the antithesis of Christian doctrine as it was promulgated for the fifteen centuries prior to the scientific revolution, and thus may be called an anti-theology. That would make the ‘chiefs’ of the corporate world—the Chief Executive Officers and Chief Operating Officers and Chief Financial Officers and their scrubbed and suited acolytes—the anti-clergy of our time. They in turn call on the great advertising and public relations firms and corporate think-tanks like the Cato Institute and the Fraser Institute and the Conference Board for support in propounding and disseminating dogma in the way the Roman Church called on the Holy Office and the Holy Orders and the College of Cardinals.
No one has better captured the essential difference between the old and the new than the historian R.H. Tawney:

The most fundamental difference between medieval and modern economic thought consists… in the fact that, whereas the latter normally refers to economic expediency, however it may be interpreted, for the justification of any particular action, policy, or system of organization, the former starts from the position that there is a moral authority to which considerations of economic expediency must be subordinated.

In other words the questions, Is it right? Is it Good? Is it in the human interest? took absolute priority over considerations of efficiency and expediency.
What I have been speaking of as a watershed, then, is really more akin to a looking glass. On one side is other-worldly Medieval society with its Christian values leavened with the ferment of humanism and classical Greek moral philosophy. On the other side we have the mirror image—Modernism—defined by market capitalism; science, with its inviolable laws; the ethics of self-interest and an obsession with the material. Modernism would eventually find a supreme manifestation in the corporation.

© 2012 Wade Rowland

The above is an excerpt from the book “Greed Inc.” by Wade Rowland. Learn more about “Greed Inc.” the book.