The Capitalism Papers “This Is a Bold, Much-Needed Book
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6 × 9 SPINE: 0.8438 FLAPS: 0 U.S. $16.95 POLITICAL SCIENCE/ECONOMICS JERRY n the manner of his bestseller Four Arguments for the Elimination of Television, Jerry Mander researches, discusses, and exposes a series of momentous and unsolvable MANDER JERRY MANDER Ienvironmental and social problems of capitalism. Mander argues that capitalism is no longer a viable system: “What may have worked in 1850 and 1900 is calamitous in 2012.” Capitalism, utterly dependent on never-ending economic growth, is an impossible absurdity on a finite planet with limited resources. Climate change, together with global food, water, and resource shortages, is only the The start of the crises. A departure from most previous writings about capitalism, this book argues that certain problems of the capitalist system are intrinsic to its structure and cannot be reformed. They have now reached a point where they threaten the survival of the planet and all of human society. He makes the case that it’s now time to view the system as the hopelessly obsolete and nonviable for the future. capitalism capitalism papers capitalism praise for The Capitalism Papers “This is a bold, much-needed book. On “Capitalism’s days are numbered. Jerry papers a subject where others are too often Mander has both the courage and abstract or strident, Jerry Mander writes insight to put the case before us, and he with a down-to-earth common-sense does it brilliantly and movingly. There wisdom. I particularly like the way he is hope for this planet and our future, Fatal Flaws weaves together his own experience in Mander argues, but only if we are honest business and advertising with a large- enough to admit that the experiment in spirited awareness of so many dimen- unregulated market capitalism has failed of an Obsolete System sions of the fragile planet we live on.” and it is time to move beyond it.” —Adam Hochschild, author of —Maude Barlow, author of Blue Covenant King Leopold’s Ghost “Point by point, Mander convincingly “a cogent rally cry and eloquent assessment of america’s—and the “[A] book of astonishing clarity and all- explains why capitalism can no longer world’s—current predicament, dismal prospects, and hope for a way out.” too-rare honesty. In an age where our serve people or the planet. and he leads major institutions are in collapse as our us to sets of principles for a new economy —Publishers Weekly environment crumbles . Mander has for the 21st century and beyond.” the courage to say that the emperor has no —annie Leonard, author of Story of Stuff clothes; that the profit-obsessed economic system we are expected to swear loyalty to “[Mander is] the patriarch of the anti- has its best days in its rear-view mirror. globalization movement.” The implications are revolutionary.” —andrew revkin, The New York Times —robert McChesney, author of Rich Media, Poor Democracy ISBN 978-1-61902-158-7 Cover photo by Gigie Cruz-Sy 5 1 6 9 5 Jacket by Michel Vrana www.counterpointpress.com 9 781619 021587 Distributed by Publishers Group West the capitalism papers THE CAPITALISM PAPERS Fatal Flaws of an Obsolete System Jerry Mander COUNTERPOINT berkeley Copyright © Jerry Mander 2012 All rights reserved under International and Pan-American Copyright Conventions. No part of this book may be used or reproduced in any manner whatsoever without written permission from the publisher, except in the case of brief quotations embodied in critical articles and reviews. Interior design by David Bullen Cover design by Michel Vrana Library of Congress Cataloging-in-Publication Data is available ISBN 978-1-61902-158-7 COUNTERPOINT 1919 Fifth Street Berkeley, CA 94710 www.counterpointpress.com Distributed by Publishers Group West Printed in the United States of America 10 9 8 7 6 5 4 3 2 1 This book is dedicated to the memory of my friend and colleague Edward (Teddy) Goldsmith, visionary, activist, compassionate inspirational leader, and the most charming, inclusive, kindest, and entertaining man I ever met. He knew everything in this book long before I did. Table of Contents Part One: INTRODUCTION I. Economic Succession . 3 The Missing Link . 5 The “C”-Word . 8 This Book . 12 Disclaimer. 13 Structural Arguments . 14 II. Growing Up Global . 18 A New World Order . 20 From Yonkers to Wharton . 22 New Dawn for Business . 24 Robert McNamara, Enforcer . 28 Forty Years Later . 32 III. The Copenhagen Conundrum . 35 Carbon Debt . 36 Cochabamba, Bolivia . 39 The Cancún Conundrum . 41 The Morales Conundrum . 43 Part Two: THE FATAL FLAWS OF CAPITALISM IV. Intrinsic Amorality & Corporate Schizophrenia . 51 Is Greed Good? . 58 Everyday Life in Advertising . 62 Are Corporations People? . 68 Corporations Are Machines . 71 V. Intrinsic Inequities of Corporate Structure ....... 73 Eight Intrinsic Inequities of Corporate Structure . 75 1. Profits from Business Operation . 75 2. Profits from Capitalization of the Public Commons . 76 3. CEO Megasalaries & Bonuses . 82 4. Stock Payments & Dividends . 85 5. Invested Earnings: The Multiplier Effect . 85 6. Wage Repression of Employees . 86 7. The “Worker Productivity” Scam. 88 8. Cashing Out: The Sale of Company Assets . 89 The Illusion of Corporate “Efficiency” ........ 90 VI. Endless Growth on a Finite Planet . 94 Ecosystem Into Economy . 97 Gross Domestic Product (GDP) . 99 What’s Left Out of GDP? . 101 Virtual Growth .......................... 104 “Planetary Boundaries” . 106 Resource Shrinkage on a Finite Planet. 107 Financial Speculation in Food Supplies . 109 Privatization of Water. 113 Peak Species & Peak Beauty . 115 Earth Island . 117 Fundamental Questions . 119 VII. Searching for Growth: Desperate Measures . 122 Seven Explorations in Growing Growth . 123 1. Shifting from Real Growth to Virtual . 123 2. Creating “New Resources”—Privatizing the Commons 123 3. Expanding the Military Economy . 124 4. Green Capitalism . 124 5. Search for Green Energy . 129 6. Creative Destruction . 133 7. Techno-Utopianism & New Nature. 139 VIII. Propensity Toward War . 150 War as Economic Strategy . 151 The Stealth Economy . 156 Doing the Numbers. 158 Commercial Arms Trade . 160 Military Keynesianism . 162 F-35 Lightning II Fighter: $325 billion (Lockheed Martin Corporation) . 163 Gerald Ford–Class Supercarrier: $120 billion (Northrop Grumman Corporation) . 164 Future Combat System: $340 billion (Boeing and SAIC) . 164 Littoral Combat Ship: $38 billion (Austal USA and Lockheed Martin) . 164 U.S. Military Bases . 167 Asia Pacific . 168 Western Europe . 169 Middle East ............................. 169 Africa ................................. 170 South America. 170 Focus on the Pacific . 171 “Comparative Advantage” of War . 175 IX. Privatization of Democracy . 178 Rule by the Rich . 179 Doing the Numbers. 182 What Is a Billion Dollars? . 184 The “Problem” of Surplus Capital . 185 Investments in Government. 186 Politicians for Sale . 191 Koch Brothers: Role Models for Neofeudal Expression. 194 Democracy? . 198 X. Privatization of Consciousness . 201 Who Needs Advertising? . 203 Living Inside Media . 205 Advertising to Children . 207 Global Reach . 208 The Powers of Received Images . 210 Are You Immune?. 210 Is Television Real? . 211 “Truth” in Advertising . 213 Virtual Reality . 216 Global Control . 218 AOL–Time Warner ....................... 220 Disney . 220 The News Corporation . 220 Crisis Point . 222 XI. Capitalism or Happiness . 226 Laissez-Faire . 227 Doing the Numbers. 228 Consequences of Inequity . 232 Economics of Happiness . 234 Sufficiency . 237 Summaries & Afterthoughts . 239 Part Three: EPILOGUE XII. Which Way Out? . 247 Four Megashifts Toward a New Economics . 251 1. Nature Comes First. 251 2. The Primacy of Scale: Not Globalization, Localization . 257 3. Experiments in Corporate Values and Structure . 266 4. Hybrid Economics . 273 Uncharted Territory ..................... 280 Bibliography . 285 Organizations ............................ 293 Acknowledgments . 295 PART ONE Introduction QUESTION FROM THE AUDIENCE: Jerry, do you mean my grand- father’s furniture store is killing the world? Is he one of those capi- talists? It’s a nice shop. He’s been there forty years, giving work to eight employees, and he pays a nice wage. With benefits. It doesn’t seem bad to me. JERRY: No, stores like that are really not the problem. We need to make distinctions when we talk about capitalism. The word covers too many different things. One distinction is this: Size mat- ters! Small-scale local or family businesses, or community enter- prises that make some money, pay salaries, send kids to college, and save a little, are not the problem, and never have been. But let’s say your granddad had somehow made gigantic profits from his store forty years ago, so he decided to partner with another store owner and invest in big real estate, converting small farms and open lands into shopping malls. And let’s say they started franchising shopping centers around the world, and were borrow- ing from big banks to do it, and then started buying banks, and buying other companies doing unrelated stuff, like shipping or mining or biotech farming, and then started getting their financ- ing from Goldman Sachs. Then they “went public” and were listed on the New York Stock Exchange as SHOP AMERICA! and they became friends with congressmen, spent 10 percent of their busi- ness income lobbying in Washington to overturn zoning, dump- ing, and other environmental laws that were getting in their way. And they had their eye on export trade subsidies, and maybe some 2 pART ONE: Introduction military contracts, and were desperate to keep their stock prices high and to keep their taxes down. Well, then, you’d have to say your grandfather would be operat- ing in a different world, with different values and drives, than he does now. At the beginning, it was all about furniture for local families and businesses, not the primary needs of nonstop capital expansion, growth, stock values, and distributions. That’s the “capitalism” I worry about. That’s what’s consuming the world.