Corporation Nation: How Corporations are Taking Over Our Lives -- and What We Can Do About It

By Charles Derber

Foreword by Ralph Nader. In Corporation Nation Derber addresses the unchecked power of today's corporations to shape the way we work, earn, buy, sell, and think—the very way we live. Huge, far-reaching mergers are now commonplace, downsizing is rampant, and our lines of communication, news and entertainment media, jobs, and savings are increasingly controlled by a handful of global—and unaccountable—conglomerates. We are, in effect, losing our financial and emotional security, depending more than ever on the whim of these corporations. But it doesn't have to be this way, as this book makes clear. Just as the original Populist movement of the nineteenth century helped dethrone the robber barons, Derber contends that a new, positive populism can help the U.S. workforce regain its self-control.

Drawing on core sociological concepts and demonstrating the power of the sociological imagination, he calls for revisions in our corporate system, changes designed to keep corporations healthy while also making them answerable to the people. From rewriting corporate charters to altering consumer habits, Derber offers new aims for businesses and empowering strategies by which we all can make a difference.

• Language: English
• Publisher: Macmillan Publishers
• Release date: Sep 9, 2014
• ISBN: 9781466881068

Book preview

ONE

The End of the Century

On July 31, 1995, the Walt Disney Company, America’s most famous entertainment company, announced it would acquire ABC, America’s premier news network. A month later, two of America’s most powerful financial institutions—Chase Manhattan Bank and Chemical Bank—decided to merge and become the nation’s largest bank. Two months after that, Time Warner proclaimed that it was acquiring Ted Turner’s Turner Broadcasting Network, thereby marrying the world’s biggest media company and the nation’s biggest cable system. Just three years later, those gigantic mergers would look almost puny, dwarfed by the 1998 Nationsbank merger with Bank of America, the Chrysler/Daimler Benz merger, and the merger between Citicorp and Traveler’s Group, the biggest in history.

Mergers and takeovers, orchestrated by financiers such as junk-bond king Michael Milken, had become the symbol of greed and power in the roaring 1980s. In sheer volume, however, the merger activity of the 1990s makes the eighties look tame. Concentration is a tidal force in banking, insurance, utilities, aerospace, pharmaceuticals, telecommunications, health care, and many other industries. The years from 1994 to 1998 set successive records as the biggest merger years in American history.

While merger mania has periodically seized the American economy, the current frenzy hints at a surprising historical precedent for the current period: the Gilded Age, which extended from shortly after the Civil War to the earliest years of the twentieth century. It was an era when captains of industry and finance such as John D. Rockefeller, Andrew Carnegie, and J. P. Morgan knit American business into national corporate fiefdoms of enormous power. Like today, it was a time of explosive change, fierce competition, and mass mergers, culminating in the famous trusts first put together by Rockefeller in Standard Oil.

With the 1990s came a second hint of a new Gilded Age: the revelation that the United States had become the most unequal country in the developed world—with the gap between rich and poor growing disturbingly vast. By the mid-nineties, not only was the gap the largest in fifty years, but as the United Nations reported, the United States is slipping into a category of countries—among them Brazil, Britain, and Guatemala—where the gap is the worst around the globe.¹

The Gilded Age, likewise, was marked by the accumulation of great wealth in the midst of overwhelming poverty. While Rockefeller and Morgan were becoming the nation’s first billionaires, most Americans, including millions of impoverished immigrants and poorly paid workers, worked twelve-hour days just to stay alive. A hundred years later, America was moving again toward a great divide of vast wealth and mass poverty. In 1998, one rich man, Bill Gates, had personal wealth of 50 billion dollars—more than the combined net wealth of the bottom 40 percent of the U.S. population, or 100 million Americans. In 1996, the richest 1 percent of the population enjoyed a median net worth of several million dollars and had accumulated 40 percent of the nation’s wealth—the highest proportion since the 1920s. At the same time 40 million Americans—including one of every four children—had fallen into poverty, also the highest percentage in decades.²

Building a Bridge to the Gilded Age

When President Clinton ran for reelection in 1996, he told Americans he wanted to build a bridge to the twenty-first century. The nation had to prepare for the millennium, he explained. According to the president, entering a brave new world of burgeoning technology meant that we would all have to get on the information superhighway, and travel together across the millennial bridge.

But in a revealing interview at the end of 1996, Clinton hinted that another bridge that we might cross leads straight back to the Gilded Age. Talking with James Fallows in The Atlantic, the president spoke of remarkable similarities between the end of the last century and the end of our own. Among the striking comparisons the president described were … labor turmoil, boom-and-bust economies, ethnic changes wrought by immigration of that era and other shocks that transformed the country. Clinton suggested that just as the Gilded Age saw a shift from an agricultural and craft-oriented economy to an industrial one, today we are changing our industrial paradigm—we’re going from the industrial age to an information-technology age, from the Cold War to a global society. Clinton also observed that, like today, the Gilded Age was a period of contradictions, simultaneously opening up dramatic new economic opportunities while threatening to leave millions of people behind. Then and now, vast fortunes are being made—people are having opportunities they never dreamed of. But a lot of people have been dislocated.³

Clinton’s historical speculations deserve serious scrutiny. The great differences between the Gilded Age and the present—including the rise of a large middle class and a vast regulatory state—make clear that we do not live in a clone of the Gilded Age. But the president has hit upon something more fundamental than he was able to flesh out in that Atlantic interview. Some of the nation’s defining qualities—its corrupted democracy and social Darwinist thinking—seem to have leapfrogged from the end of the last century to the end of this one.

Historian Arthur Schlesinger, Jr., has written of American political history as cyclical. The political pendulum’s swing from Gilded Age conservatism to the liberal reaction of twentieth-century progressives to the counterreaction of the Reagan-Gingrich era is part of the picture. But the historical parallels with the Gilded Age go far deeper. They involve seismic shifts in the organization of markets, shocks to traditional notions of fairness and community, the rise of a new culture of greed, and a radical rewriting of the contract between corporations and workers. In both eras, the balance of power in the nation shifted drastically, with corporations gaining great new power relative to contending forces such as unions. Both periods were golden ages of business.

The Gilded Age brought both hope and tragedy. It ushered in the American century, with the United States emerging as the new industrial power that would replace Britain as the guardian of a new world order. Americans—among them millions of immigrants who dreamed of a better future—were never more hopeful about their prospects for prosperity. The booming new industrial economy created by the robber barons—the popular name given to Gilded Age business leaders—allowed many citizens to realize their dreams, and the Gilded Age showed the remarkable potential of American business to harness the resources of the