Democracy And Free Markets: Is That All?

Government Legislation and Regulation of Business

(Participant) Concerning regulation this from CNN, "America's History Of Monopoly-Busting Can corporations like Microsoft be too big, too powerful and too greedy? By Brooks Jackson/CNN Overall, there are more investigations and more lawsuits. A century after Sherman, trust-busting is coming back."

Sarbanes-Oxley is also considered the most far-reaching legislation effecting corporate America since Sherman.

Concerning the trend toward monopolies, eight of the top twenty companies in the world are American as measured by the Fortune Global 500. Four of the twenty are in oil and gas, only two of which are U.S. companies. Five are in autos, with only two U.S. companies. Not one company has a monopoly and in every instance the U.S. Company competes with a comparably sized company or companies.

Furthermore, half of the companies that were on the list in 1980 are no longer on the list replaced by new companies including the number one company on the list, Wal-Mart.

The reality is even if there is a narrowing of companies as measured by revenue; this has not resulted in less choice and higher prices to the consumer. The past decade has witnessed unprecedented value in terms of choice and price, part of the reason why, "In the category of "stuff," Wacker and Taylor revealed that the poorest household today has more general belongings than the average household in 1971."

What has the impact been on job creation and who Americans work for? As indicated earlier more new companies have been started at all levels and the rate of increase is consistent at all levels. Also, "In the late 1960s, one in four persons went to work for a Fortune 500 company; in 1980, it was one in five; in the late 1990s, it was one in fourteen.

Even the concentration of the media often cited as a concern is not an example of monopoly as there is competition. If there is little differentiation in the product this has to do with trying to satisfy the audience. Americans, whether we like it or not, prefer infotainment to real news. As the audience members in Florida who were polled after the first Bush/Gore debates said, "Gore was confusing us with all his facts and figures and foreign policy. Bush was simple and we could understand him."

Despite the consolidation in the media, the three networks combined make less than TV Guide and their audience continues to dwindle. So who is controlling whom?

If there is an unholy alliance of government and business Wal-Mart, the largest company in the world, isn’t a participant. They have been proactive in trying to register those voters who are least likely to vote (who are also their primary customers) by providing voter registration in their stores.

I agree. We need to change priorities and to get people to think more long term about the effects of our educational system, treatment of the environment, etc. and less about their current consumption. We need to get more of our citizens to vote than the current average of around 50%.

Change the attitude so that it is how you play the game that counts not win at all costs as measured by he who has the most toys wins.

I agree with Harlan, one place to start is to get the money out of politics. The other is provide more incentives for people to save and invest long term. Provide incentives for better education and to get more education but don’t lower standards to create the illusion of improvement. Create incentives for the environment. With intelligence and integrity all this is possible in a socially responsible way which doesn’t have to put our corporations at a disadvantage on the global market.

"It took 5000 years to create humankind's cumulative database up to the year 1966, and it took 30 more years to double that database—to double all knowledge. It will double again in six years." I am an optimist and believe in our ability to use this knowledge wisely.

1. Ethanol - Congress is set to pass the ethanol gas additive energy legislation. This will put billions of dollars in the pockets of Midwest corn farmers, but motorists on the West and East coasts will pay a disproportionate share of those billions, effecting a wealth transfer from the coasts to the Midwest. Both democrats and Republicans view the Midwest as pivotal to the outcome of next year's elections.

2. Tax cut - Tom De Lay, House Republican leader, said yesterday that the House would not provide an increased tax credit to 6.5 million low-income families who did not receive it in the new package.

3. California lawmakers friendly to high-tech industries pushed yesterday against requiring companies to count options against their bottom line. Without it, investors will continue to get misleading information on companies' financial performance.

4. The cost of prescription drugs is so high in the USA that some entrepreneurs can buy the drugs in Canada, resell them in the USA at a much lower price and make a handy profit. Free markets at work. However, under pressure from the pharmaceuticals in the USA, health regulators here have begun a crackdown on such operations. The USA manufacturers, in a further attempt to choke off this competition have begun limiting shipments to their Canadian suppliers. USA consumers are paying among the highest drug prices in the world and their cost is rising every year.

Just as an example, while your facts about large corporations are probably correct, it is ALSO true that an industry dominated by a few ("duopoly") is not counter to the idea that the trend is toward monopoly. Add that those twenty corporations have an increasingly larger share of total global output and the fact of their being American was not in my argument. In fact the US does not own globalization, but the number of players is small.

etc.

Glad you liked my hint at the dark side.

I only mention the nationality of the companies because it speaks to the influence they have in the market place and on government. Is BP going to have the same influence in the UK that it has in the US or China? If the playing field is the world then the government/business alliance is much broader than the U.S, which I don’t deny but gets very difficult to manage and often all for naught as unpredictable market forces can pull the rug out from under you.

I have argued that one way to weaken the influence of business in politics is to take the money out. Also, find a way to get the other 50% of our nation to vote. Many of the changes will require cultural changes which take time.

Dick, I don’t deny the influence of advertising any more than the local drug dealer. "I couldn’t help myself" doesn’t sit as well with me as "just say no." This of course requires a cultural change, which in part can be accomplished by changing the incentives for savings and investment.

On the subject of advertising, I have always wondered why political ads don’t have to abide by the same rules of truth in advertising.

Even if you had balanced news coverage with thorough analysis of subjects, how do you force people to watch? You can’t unless you change the culture so that Americans want to be well informed and appreciate the importance of being well informed. Maybe then a candidate who is a policy wonk won’t be a negative.

Dick, as you know, I don’t have a problem with intelligent regulation. Do we want to regulate advertising? I don’t know and it would concern me because I enjoy them more than the programs.

In 23:6 and 23:13, I tried to address those propositions directly. I can't believe I was so persuasive that there wasn't anything more to say. But the intervening comments, while equally stimulating and provocative, are not as directly addressed to your two initial propositions as I was trying to be.

Can I assume that you now agree that (a) democracies don't necessarily tend toward tyranny (since most of them seem to have avoided it so far), and that (b) free markets don't necessarily tend toward monopoly, if wise and sensible public regulation is stirred into the mix?

Relying solely on market orientation will not provide the structures and media necessary for the cultural change you describe. That requires the professions of journalism and education, both of which are becoming market oriented, and unable to contribute to that kind of change. To use your example, without those professions following a higher calling than market orientation, how would one develop the necessary consciousness and training to enable one to "just say no" to some advertising gimmick--if indeed we could ever beat the advertisers at that game--especially children.

Most of the cultural changes I suggest have to be driven by government and why it is so important that we minimize the influence business has on politics.

The challenge is to be proactive with cultural change to try to avoid further decline and also to improve our circumstances rather than have cultural change be a reaction to difficult circumstances (absolute disaster). As a nation, I don’t know that we are very good at being proactive.

Is journalism so important and critical to a thriving democracy that it should be removed from a market orientation? If you believe that it is, than regulate and fund it the way you would other functions such as education, FAA, etc. There was a time when network news was considered an obligation, a type of public service that was not expected to be profitable. What has changed as with all business today is that the world is much more competitive. It is much harder to make an adequate return let alone stay on top, and as a result the scorpion doesn’t think it can afford to be altruistic. The attitude in business today is kill what you eat. If you don’t contribute to the bottom line you are history.

(Participant) Yes, a free and investigative press is vital to democracy, but there two ways to lose a free press. One is for the government to shut it down, the other is for the corporations that sponsor it to reduce it to market-oriented stories. I think that journalism should be protected by law as it is in the Bill of Rights, and also as a profession, just as we try to protect medicine and education (not very well, it turns out). That means it has to protect itself, but it could also be protected in the way that the BBC is protected by state support. There will always be a place for market oriented journalism, the tabloid press, but we need for journalists to be able to answer their higher callings.

Douglass Carmichael On the contrary, Harlan. Germany was a democracy. France under the revolution was a sort of democracy. Russia before the revolution had is beginnings of democracy. Italy was a democracy that let in Mussolini. Chile is a complex case as is Argentina. But they are all complex (compromised) cases, as is that of the US.

And we have the central work of Plato and Aristotle who said simply that democracies are the last phase in a cycle that ends in tyranny. Fukuyama’s End of History to me (this is idiosyncratic) that managed democracy led by capital wins–and that to me is pure happy face fascism. But please keep pushing back because it forces me to be conscious and learn. I especially like your Teflon surgical approach, but I want a diagnosis.

Streams tend downhill, but don't necessarily get there. That doesn't take away from the tendency, and it does reinforce the idea that things can be done to prevent the tendency from becoming realized.

But there are two other considerations.

Are countries that assume great power, i.e., empires, able to take on the mellowing regulation you propose, or are the dynamics of the need for power so attractive—and necessary—as to preclude a gentler America?

Second, why do we think we are immune to the forces of modernism? Germany in WWI and WWII, and the fate of Italy were not aberrations, but similar to the same kind of (differences may be important) conditions as we have now. That is, the need to organize and govern capital, tech, status and the military, and in the context of human nature.

The NYT problems arise because I think the shift away from reporting and towards story telling. As Garrison Keillor once said "the truth just does not go far enough" (national press club about ten years ago). We get a population and a collection of reporters that like a story more than the truth.

So I keep wanting to nudge our frame out from the dynamics of the moment to the dynamics of at least to the enlightenment, and ideally back to the fall of the HRE and the rise of nation states, and even back to the rise and fall of Rome. These frames are much more relevant than we were ever taught (unless you had a deep teacher) in HS and college and beyond.

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