E: In this blog many times we are advised to reread Karl Polanyi’s classic, The Great Transformation. Good advice, which I am heeding. My view is that underlying both the euro and neoliberalism (and associated things such as austerity) is the power of unfettered multinational corporate capital. I try to include this view in everything I say to anyone about economics.
Me: Yes, but what is the power behind the corporations, and what is the current paradigm of that power? Finally, what is the new paradigm that will replace the primacy of the old one and resolve its problems?
E: Good questions Craig. No simple answers to post here. My point is to encourage all discussions of politics and economics to stop ignoring the elephant in the room, the dominant institution of our time. The power of modern corporate capital (an expression I prefer to the ideological “capitalism”) is 419 years old this year. The concept of corporate “personhood” is at least 150 years old. These are long times for the development of complexities, so none of it is simple.
Its current expression of increasing dominance is rentier, or unearned, capital (as contrasted with capital that actually accomplishes something, the core of the “real” economy).
The current fascination with “sustainability” offers some focus for investigating corporate power. Hyman Minsky’s work shows how it is unstable, different from Marx’s focus. If it is unstable, likely it is unsustainable, and so will an economy where that power is dominant. Perhaps not crashing for good in my lifetime, but still … .
Me: I can certainly get behind curbing the power of multi-national corporations global reach (or even domestic ones who choose domination over cooperation). If corporations want to be legally considered individuals then they should be subject to the same legal sanctions as individuals and also be able to benefit from the policies I suggest….so long as they do not commit accounting fraud or any other economic vice. Humanizing the economy, like life, grants both freedoms and demands ethics.