Corporations and the future of our democracy

It is hard to get perspective on the times in which we live, but In the United States now it seems that we may be in the first stages of some strange power shift. The economic benefits conferred by corporations may be now outweighed by the political harm they cause.

These thoughts come to mind after reading the news this morning. First, a Washington Post article about the level of corporate spending in this year's election. Millions of dollars are being spent - much of it on misleading and outright deceptive advertising. The bulk of this advertising and money supports conservative Republican candidates. Candidates who are pledged to support policies that support wealthy people and large corporations. Because of recent Supreme Court decisions - decisions by an extremely conservative Supreme Court - the donors do not even have to reveal who they are.

And what are these corporations doing for the nation economically? Not so much. They are profiting from government policies - sometimes from the very policies they criticize. The New York Times has an article about the billions of dollars they are borrowing at rock-bottom rates, essentially sucking cash out of the economy. What are they doing with this cash? Nothing. Absolutely nothing. Sitting on it. Waiting for the economy to recover - so they can more profitably invest the money they have borrowed so cheaply. No one has the incentive to go out and make the gamble to spend the money first. We cannot count of private industry to help the nation in its current economic woes.

In short, the nation's relationship with its corporations may be tipping. Corporations for roughly the last 150 years have played a dominant role in our political and economic life. And large corporations, of course, have always inflicted some harm on society. Take W.R. Grace Inc., which poisoned the populations of entire communities. Companies such as the Anaconda Copper Mining Company killed and beat workers who sought higher wages. C. Wright Mills argued more than 50 years ago that large corporations enervated the nation's very soul. On the other hand, the corporation as a financial entity also allowed profitable investment of capital and economic development for the country as a whole. Incorporated businesses can raise money through stock sales, ideally using the capital to invest profitably and benefitting stockholders and the rest of society. But what economic development are corporations offering now? Not much. At the same time, the harm corporations inflict on our democracy is steadily growing.

US conservatives hate Europe

This seems like a blanket statement - and OK - it's meant to be provocative. But I think it's true as a rule. US conservatives look at Europe as an example of the social democracy that they abhor. It's worse - because it seems to work pretty well in many places of Europe.

Jim Manzi recent column about the comparative growth rates of Europe & the US is one example of the attitude espoused by conservatives here. It's a piece rife with factual inaccuracies - a perfect example of attempting to make data fit pre-determined conclusions. He would receive an "F" in any economics class.

Paul Krugman's column fortunately explains why Manzi's argument is completely flawed. Nonetheless, one can count on the US press - owned by conservatives, by and large - to give broad publicity to a completely fallacious argument.

Economy as a science

This afternoon I came across this news blurb on ITAR-TASS. Funny. A big conference where more than 1,000 papers on the Russian economy will be presented. The fundamental problems of the economy are not so mysterious or technical. Excessive reliance on raw materials, especially oil & gas. Corruption. And a lack of democracy that allows this corruption to survive and even thrive. The problem is not knowing the technical problems of the Russian economy. The problem is getting the people who benefit from the current state of affairs to relinquish their privileges for the sake of the country as a whole. It's a mess. I wish them every success - but it will take more than conferences to fix Russia's economy.

Conversation at the market

When I was buying vegetables in the market yesterday, a young man asked me in English where I was from. I replied at first in Russian, but it was clear the man spoke English well and wanted to practice the language, so we began to speak in English. I never do this in the market. For one thing, I very rarely meet anyone who speaks English. For another, I don’t like to be a more obvious foreigner than I am. So - I usually just speak a mixture of Russian and Azerbaijani.

Perhaps out of habit, the young man invited me into his store, but I joked that there didn’t seem to be much there for me. (A gay array of multi-colored bras hung in the window.) Yes, he acknowledged, the shop is mostly for women.

The young man spoke excellent English. He had earned a master’s degree in economics four years ago. I didn’t ask why he was working in a little lingerie shop in a run-down shopping area. The fact is that there are scores of well-educated Azerbaijanis who cannot find good work in Azerbaijan and can’t get the necessary visa to emigrate.

We chatted a bit about the nearby retailing areas, the high prices in some of the other places. Prices are better in this little bazaar area, we agreed.

Working in the shop, he said, is just a part-time job. Something to do, to get some experience.

(Above are a couple of photos taken during a long walk through Baku on a uniformly gray day.)