Corporate Pharaohs: a Vicious Circle of Globalization

By Richard Brinkman and June Brinkman

Richard received his education on the East Coast: A Master's degree at the Fletcher School of Law and Diplomacy, and a Ph.D. in Economics at Rutgers University in New Brunswick, N.J. Both Richard and June were raised in the inner city of Newark, went to the same high school, and were married in 1954. June received a bachelor's degree from Portland State University and a Ph.D. from the University of Oregon, both in Sociology. This interconnection between the economic and sociological permeates their basic research focus which, overall, is directed toward an analysis of the dynamics of culture evolution. Richard's and June's current research interests relate to the interrelation between globalization and culture.

• Language: English
• Publisher: Xlibris US
• Release date: Jun 19, 2013
• ISBN: 9781483621432

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Copyright © 2013 by Richard Brinkman and June Brinkman.

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Rev. date: 07/08/2013

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Contents

Synopsis

Academic Assessments

Acknowledgments

Introduction: An Overview

Part 1: Theory—The Dynamics of Culture Evolution

Chapter 1: Corporate Pharaohs and Megacorporate Globalization: Toward a Conceptual Clarification

The Interrelation of Concepts and Theory

Toward a Conceptual Clarification of Corporate Pharaohs

Toward a Conceptual Clarification of Megacorporate Globalization

Rashomon Economics

Chapter 2: Toward a Theory of Economic Evolution

Evolution: The Inorganic to the Organic to the Superorganic

Culture: That Complex Whole

The Stages of Economic Evolution: Form and Structure

Technology: The Dynamics of Culture Evolution

The Wheel of Economic Development

The Veblenian Dichotomy

Chapter 3: Free Trade Theory: Errors and Omissions

The Origins of Free Trade Theory and Policy

The Absolute Advantage of Adam Smith versus the Comparative Advantage of David Ricardo

The Secretary-Lawyer Analogy

The Pure Theory of Trade

The Whoppers: A Critique of the Magnificent Assumptions

The Omissions: A Critique of Concept and Theory

Was that Wise Old Scot the Wisest After All?

The Rise of Free Trade Imperialism

Chapter 4: Toward a Theory of Human Value

The Problem of Concept and Theory: The Literature on Value

Neoclassical Economics: The Utility Theory of Value and Hedonic Psychology (SWB)

Veblenian Cultural Economics: Toward an Instrumental Theory of Human Value

The Place of Science in Modern Civilization

Toward a Theory of Human Value: A Protean Process of Self-Realization

Part 2: The Empirical: A Vicious Circle of Megacorporate Globalization

Chapter 5: Megacorporate Globalization: Born in the Womb of Mother Capitalism

Introduction: Circular and Cumulative Causation

Capitalism: Toward a Conceptual and Chronological Clarification

Capitalism as Merchant Capitalism

Capitalism and the Industrial Revolution

Capitalism: The Two Stages of Modern Globalization

Stage One, the Period between 1870 and 1931

Stage Two, the Period between WWII to the Present

Capitalism and the Conflict over Sovereignty: The Nation-State versus the MNC and the Emerging Corporate State

In Summary:

Chapter 6: The Commanding Heights of Neoliberal Paradigm: The Low Road

Neoliberalism: Concept, Theory, and Policy in Dominance

The Historic, Evolutionary Roots of Neoliberalism: The Chicken versus Egg Conundrum

The Permeability of American Culture and Academia to Neoliberalism

The Crisis Hypothesis and the Industrial Policy Debate

Economic Restructuring: Corporate Social Engineering and Planning

Neoliberal Policies: The Low Road versus the High Road

Chapter 7: Karl Polanyi and the Globalization Debate: A Case of Déjà vu

Polanyi’s Theory of the Double-Movement

Empirical Evidence: The State of Social Well-Being

The Distribution of Income and Economic Wealth: Natural Law versus Politics

Chapter 8: The Berle and Means Thesis Revisited: The Managerial Revolution

The Conception of the Corporation: Legal, Institutional, and Cultural

Berle-Means Thesis: The Issue of Management versus Owner Control?

Galbraith: Keynesian versus Veblenian Roots

Galbraith and the Berle and Means Connection

Summary:

Chapter 9: A Satanic Synthesis: A Marriage Made in Heaven or Hell?

The Gilded Age of the Moguls: 1865-1901

The Long Gilded Age, Circa 1865-1929

The Second Gilded Age, Circa 1968-2008:

The Number: The Tail that Wags the Dog

What Have They Done with: All That Hard-Earned Money?

Neutron Jack Welch: A Prototype for Current Corporate Pharaohs

Part 3: Policy: Toward a Human Development Strategy

Chapter 10: Human Development and Economic Development: A Concomitant Connection

Growth versus Development: Toward a Conceptual Clarification

The New (Neoclassical) Growth Theories

The Exponential Paradigm: A Doomsday Denouement?

Human Development, Economic Development, and the Human Life Process

Chapter 11: America at a Turning Point: To Deny the Social Is to Deny the Solution

The Nemesis: The Reign of Megacorporate Power

The Issue of Sovereignty: Corporate Culture as the Locus and Control of Power Manipulation

Cultural Lag: Concept, Theory, and Policy

A Raw Deal: The Legacy of George W. Bush

Why History Repeats Itself: Toward the Denouement of Neoliberalism

The Banyan Tree: Toward a Unity of Knowledge

The Second Great Transformation: Toward a Human Revolution

The United States: In Decline and Disarray?

China: A Slumbering Gulliver Has Awakened

Europe’s Promise: The Trimtab Factor

Endnotes

Selected Bibliography

Dedication

To: Our parents

William and Ida Brinkman and

Russell and Emma Boutillette

Synopsis

This study is directed toward an analysis and evaluation of the epochal event currently known as globalization. This objective requires an analysis of the economic process that is predicated on an interrelation to the dynamics of culture evolution. This entails the application of a relevant conception and theory of the globalization process demarcated by a focus on culture. The globalization process is conceptualized as an international umbilical cord of corporate cultural diffusion. Culture in the anthropological conception as that complex whole by definition is interdisciplinary and holistic. Consequently, the economic, the political, the social, the anthropological, the psychological, and the social psychological are not viewed in isolation but appear under an umbrella of culture, as a rubric, in the promotion of a synthesis of the social sciences in general. Clarence Ayres appeared clairvoyant when he stated that the later nineteenth-century concept of culture which Veblen absorbed during his formative years and which has become the foundation concept of all twentieth-century social thinking

(1970, p. 1050).

By comparison, the orthodoxy or mainstream, as the neoliberal approach, embraces an analytical purview that is devoid of the social and the cultural. As a result the social and the cultural came to be disembedded from the economic process. From this it became predictable that the destruction of humankind’s social fabric would ensue. It was argued that this would be avoided via a self-regulating market (SRM) system. Unfortunately this salubrious solution did not take place. The Nobel laureate, Joseph Stiglitz, has argued that the invisible hand was not working in that it does not exist. The historic, empirical anomalies bear out the maladjustments and malaise characterized by the reliance on an autonomous SRM system. It has been noted in the literature dealing with globalization that this has led to a gigantic cultural lag manifest in the development of a global economy has not been matched by the development of a global society… instead there has been a widespread belief that markets are self-correcting and a global economy can flourish without any need for a global society. (Soros 1998, p. xx).

It appears that the Nobel laureate, Gunnar Myrdal, can be ranked as a leading if not the leading economist of the WW II era of those writing in the social and cultural genre. Myrdal was early in questioning the use of GDP as a measure of progress and human development (Brinkman and Brinkman 2001). Myrdal’s conception of economic development as the movement upward of the whole social system which precluded the use of GDP from being the sole indicator and served to include the social and cultural as a basis for economic and human development. Statistics demonstrate that while an economy could be experiencing robust increases in GNP human needs were not being met (Miringoff and Opdycke 2008). The question becomes not how well is the economy doing but rather how well are the people doing? To be noted, Myrdal was also very much concerned with value theory in relation to an equality of opportunity and the need to promote a participatory democracy. Value theory, as put forth by Veblenian economists, relates to the instrumentalism of John Dewey.

Academic Assessments

The Brinkmans have brought decades of learning and teaching to bear on a crucial issue. In this book Richard and June Brinkman have woven their own thoughts and the thoughts of many other social scientists into a unique critique of globalization. Central to their contribution are Thorstein Veblen’s critique of the competitive American economic order and John Dewey’s instrumentalist approach to social thought. Fundamental to the Brinkman’s interpretation of globalization rests upon dominance of the American corporate Pharaohs. The Brinkmans explode the mythology behind neo-liberalism and explain alternative visions of a peaceful and cooperative international order. The basic focus is to explain and analyze the process of globalization fed by the dynamics of culture evolution.

—William Dugger, Professor of Economics, The University of Tulsa

Brinkman and Brinkman have constructed a groundbreaking work that is simultaneously a paean to Veblenian cultural economics and a logical critique of the neoclassical/neoliberal orthodoxy that is at the root of the various processes called globalization. Utilizing Veblenian cultural economic theory, the authors show how the neoclassical/neoliberal paradigm has benefited an internal corporate elite (corporate pharaohs) at the expense of underdeveloping large swathes of humanity, leading to ever greater inequality in well-being and basic needs. They explain why it is not enough to rely on GDP statistics as indication of economic success – pointing out that economic development requires social transformation, not simply additions to measured output, and social transformation is ultimately the product of culture, broadly defined. They ultimately argue that capitalism should not be relegated to just a tool of creative destruction, serving the interests of a narrow elite, but should become a catalyst for creative construction directed to improving society by enhancing technological progress, social justice, and economic equality.

—Satyananda Gabriel, Professor of Economics and Finance, Mount Holyoke

Economist Richard Brinkman and sociologist June Brinkman have produced a provocative study of contemporary capitalism, including its historical background as well as its current globalization. It is rooted in a theoretical and value-based matrix derived from Thorstein Veblen and like-minded thinkers such as Karl Polanyi and John Dewey, and provided a sweeping panorama of corporate capitalism and its problems without indulging in utopian fantasy as to how to correct them policy-wise. The large corporations that dominate the American economic scene, in particular, are portrayed as analogous to the Egyptian Pharaoh, causing economic waste, predation, and inequality, leaving tens of millions without the resources for an adequate livelihood. Historically, the predatory rich have moved from their depredations during the 1930s Great Depression to the economic crises we are presently undergoing, leaving pressing social needs unsatisfied and often unrecognized. In Short, capitalism does not adequately serve the collective needs of the community and the Brinkmans believe large-scale changes are in order (not revolution) if large numbers of people are to satisfy their quest for self-fulfillment. Their skillful blending of cultural, socioeconomic, and historical factors gives the study a broad interdisciplinary flavor, which will attract readers from across the social studies spectrum especially those with left-liberal political or ideological slant.

—Rick Tilman, Professor Emeritus of Public Administration at the University of Nevada

Acknowledgments

We acknowledge and are grateful for the help received from editors and students plus social scientists in general and economists in particular, past and present. We thank those who have enabled us to make a contribution to the literature dealing with globalization. Our specific contributions have been cited in the bibliography in our book. Though the literature dealing with globalization is large and growing it has yet to offer an agreed-upon conception of globalization nor has it offered an agreed-upon concomitant theory of the globalization process. In this context, our book focuses on a holistic conception and theory interrelated to the globalization process encapsulated in the dynamics of culture evolution. An alternative paradigm to resolve the current conundrum appears to be in order. In this context, to be recalled, Thomas S. Kuhn argued in his Structure of Scientific Revolutions that anomalies lead to new structures of science. But where might we begin, given our current store of potentially useful knowledge that has been accumulated in our culture?

The Veblenian paradigm is apparently relevant and potentially capable, in both concept and theory, of dealing with the evolutionary dynamics of culture in relation to globalization. Nonetheless, to our knowledge, it appears that Veblenian economists have as yet to produce a full, book-length study dealing with the epochal development known as globalization. Our study represents such an attempt to offer a full-length study of globalization fed by the dynamics of culture evolution.

Also, we wish to thank the Millar Library staff for their general cooperation, and in providing us with a study space in order to carry out our research. In addition we are indebted to the staff of Xlibris Corporation for their cooperation and encouragement along the path to publication. And finally, last but not least, we give thanks to Tony Newport and his applied computer expertise.

Introduction

An Overview

Our study is directed toward an analysis and evaluation of the epochal event currently known as globalization. This objective requires an analysis of the economic process that is predicated on an interrelation to the dynamics of culture evolution. This entails the application of a relevant conception and theory of the globalization process demarcated by a focus on culture. Culture in the anthropological conception as that complex whole by definition is interdisciplinary and holistic. Consequently, the economic, the political, the social, the anthropological, the psychological, and the social psychological are not viewed in isolation but appear under an umbrella of culture, as a rubric, in the promotion of a synthesis of the social sciences in general.

In support of our predilection toward culture, Globalization is a Cultural Process… any analytical account of globalization would be woefully inadequate without an examination of its cultural dimension (Steger 2005, pp. 37-43). This need is currently being addressed in the globalization literature under a generic of globalization and culture (Featherstone 1990; Pieterse 2009; Robertson 1992; Tomlinson 1999; and the general contributions of Manfred Steger and especially his forthcoming Globalization and Culture, October 31, 2012). Given the complexities of a culture conception, many difficulties exist in defining What is Globalization? (Beck 2000). Given a literature search, it is easy to conclude that there is no standard definition of globalization or even a standard model as to how it works (Veseth 1998, p. 25). Conception of a process interrelates to the theory of the process that is applied. It is also noted in the literature that no agreed-upon theory exists. Despite a vast and expanding literature there is, somewhat surprisingly, no cogent theory of globalization nor even a systematic analysis of its primary features (Held, McGrew, Goldblatt, and Perraton 1999, pp. 1, 436). Yet scientific analysis requires, as a prerequisite, the need for a relevant concept and theory that is to be applied to the globalization process. It is arguable that the framework of neoliberalism, which has dominated at least up to the Great Crash of 2008, does not meet this mandate of relevancy.

To be developed and explained throughout the course of our study is a predilection for the Veblenian school of thought as the most relevant to evaluate and unravel the complexities manifest in the current process of globalization. What then constitutes Veblenian economics? This is not an easy question to answer. To begin with, the current literature dealing with Veblenian economics is daunting. This is apparent in the growth and expansion of its dimensions that appear in articles, journals, and books. At the outset, it should be noted that it was Walton Hamilton who christened Veblenian economics as institutional economics. This nomenclature caught on and has endured the test of time. However, it should be recognized that it was not Veblen who chose the title of Veblenian institutional economics.

It is arguable, and constitutes our position, that a more holistic conception of Veblenian economics is warranted and resides in Veblenian cultural economics. Culture conceptualized by the anthropologist, Edward Tylor, as that complex whole, was frequently noted by Veblen. This emphasis has been used to connect Veblen to anthropology. Clarence Ayres, as a leading Veblenian economist during the post-WWII era, has stated in terms of conception and theory: Such a unified theory exists in embryo at least… That germ is the later nineteenth-century concept of culture which Veblen absorbed during his formative years and which has become the foundation concept of all twentieth-century social thinking (Ayres 1970, 1050).

Clarence Ayres has not been alone in suggesting this analytical purview. Among others, in addition to Ayres, other leading Veblenian economists—also stressed the importance of culture (Allan Gruchy 1947, 1972, and 1987) and endorsed by Glen Atkinson, William Dugger, William T. Waller Jr., and David Hamilton 2010, 2004, 1991) Anne Mayhew (1994), and Richard Brinkman (1981)—also apparently have viewed culture as a foundation concept and theory to Veblenian economics. All of which will be fully supported in many additional references to the Veblenian literature in the course of our study. In any event, our preference is for Veblenian cultural economics, which best delineates the basic framework of concept and theory that warrants an application to the globalization process. This analytical purview would of course be debated by mainstream Veblenian institutional economists.

Our overall analytical purview of the economic process and globalization resides in the dynamics of general culture evolution. Given that our preference is toward Veblenian cultural economics, how then to analyze the process of globalization in the long-term dynamics of culture evolution? Ancillary to this desideratum, as noted previously, our study makes copious references into the domain of the history of economic thought. Our study, in support of these objectives, is divided into three basic parts:

Part 1. Theory—The Dynamics of Culture Evolution

(Chapters 1-4)

Part 2. The Empirical—The Vicious Circle of Megacorporate Globalization

(Chapters 5-9)

Part 3. Policy—Toward a Human Development Theory and Policy

(Chapters 10-11)

Part 1. Theory—The Dynamics of Culture Evolution

In terms of a brief overview of our study, chapter 1, Corporate Pharaohs and Megacorporate Globalization: Toward a Conceptual Clarification, deals with the important concomitant connection that exists between concepts and theory. Three important concepts that are addressed in chapter 1 relate to globalization, corporate Pharaohs, and Rashomon economics. The metaphor, in the form of corporate Pharaohs, serves to draw an analogy to American corporate CEOs and the kings, the Pharaohs of ancient Egypt. It is the institutional structure embedded in any culture, past or present, which grants power to power elites. This power is of central importance in terms of the distribution of wealth and production that in their circularity serves to reinforce that power. For the Egyptian Pharaohs, surplus production was used for wasteful funerary purposes and manifest in the great pyramids of antiquity. For the corporate Pharaohs, as kings of the American economy, policies are pursued that increase their share of income distribution and power.

The globalization process is conceptualized in our study as an international umbilical cord of cultural diffusion. This conception constitutes a composite of cultural complexity that is consistent with Veblenian cultural economics. This conception also directs analysis toward a holistic and interdisciplinary methodology. It also overcomes the basic shortcoming of neoliberalism which serves to remove the social and cultural factors from scientific analysis.

Chapter 1 offers three different potential prototypes for conception and theory. From the right, the neoliberal framework is comprised of conception and theory that is exemplified by The Commanding Heights (Yergin and Stanislaw 1998). A more centrist analytical framework, from a liberal-progressive Keynesian, is manifest in Globalization and Its Discontents (Stiglitz 2002). And from the heterodox left-leaning, we find When Corporations Rule the World (Korten 2001). Though the subject under review, as globalization, is the same, each framework offers a different conception and theory of the globalization process. Why is this so, and how then to choose from among the three alternatives: Yergin and Stanislaw, Stiglitz. or Korten, as listed above?

It is at this juncture that we introduce a conception which might be called Rashomon economics (Richie 1969). First as a novel then made into a movie, Rashomon tells of a story in which a murder and rape take place. Though both of these events were the same for all, each of the potential witnesses tells a different story. Each witness puts forth a story in a framework that best supports their own vested interests. How then to discern the truth, and who decides which story is correct. So it also goes for economists as well. Though witnessing the same event as globalization, which economist as a witness has the correct analysis? Which framework then, immersed in the history of economic thought ostensibly relying on a prism of science, is the most relevant to explain the merits of the globalization process? Who has the power in the American economic arena, in the realm of the sociology of knowledge (better perhaps delineated as cultural epistemology), to choose and innovate from among the three paradigms listed above? Does the choice necessarily always relate to scientific truth? Or rather does it relate to those who have the political power to innovate that choice for society in deference to their own vested interests? Our predilection as to choice from among the alternatives offered in the context of Rashomon economics, as the most relevant and warranted, is for the innovation of Veblenian cultural economics. But why might one assume Veblenian cultural economics to be the correct path to pursue?

Chapter 2, Veblenian Cultural Economics: Toward a Theory of Economic Evolution, relates to the concept and theory that is contained in the paradigmatic boundaries of Veblenian framework. Some have argued that Veblen did not originate or provide for the genesis of a general theory. We find this critique to be wanting. We agree with David Hamilton who argues that a general theory which is already at hand. Veblen left to institutionalism a general theory (Hamilton 1978; 2010, pp. 9-16, 37-44, and the title, passim, Cultural Economics and Theory: The Evolutionary Economics of David Hamilton; Ayres 1970). Theories in economics are interrelated to the concomitant level or stage of culture evolution in which the theory has been formulated. Consequently, in this sense, economic theories will never be finite but rather continuously evolve and are predicated and relevant to the stage of culture evolution in which they have been formulated.

The Veblenian conception and theory of the economic process are directed toward a composite gestalt that focuses on a trilogy demarcated by evolution, culture, and human value. The process of evolution appears as the grand design of the cosmos, from the inorganic (as the physical) to the organic (as the biological) and on to the superorganic (as the cultural). This cosmic conception of evolution leads to a captivating conclusion, to be reached by the human intellect, which infers that humankind has evolved from stardust to us. Chapter 2 addresses the concept of culture as that complex whole which directs analysis, by definition, to a holistic and interdisciplinary methodology. The dynamics of structural transformation of culture in its evolution is predicated on the advance of technology. Technology, in turn, appears as a culture conception to include both material and nonmaterial technology which constitutes the core of culture (Brinkman 1997). To transform technology is to transform culture in that it is substantively comprised of the technics of technology. Whereas technology constitutes the application of knowledge, culture serves substantively to function as its store. Chapter 2 also includes new and innovative interpretations of the Veblenian dichotomy which interrelate the advance of technology, juxtaposed to the pecuniary, or business institutions. Other issues dealt with are a stage’s approach to economic development: the refutation of the charge of technological determinism, Myrdal’s virtuous circular causation in the wheel of economic development, and the role of knowledge in the economic process as delineated by Simon Kuznets, among others. Basically, chapter 2 concerns the Veblenian conception and theory in terms of the long-term dynamics of culture evolution which, in turn, constitutes what we are applying to an analysis of the globalization process.

Chapter 3, Free Trade Theory: Errors and Omissions, is directed toward a critique of neoclassical trade theory. Free trade, as policy, constitutes a form of international laissez-faire. Free trade still is argued in textbooks and by mainstream neoclassical academics to be the best basis for trade-policy formation. The Marshallian offer curve analysis and methodology in support of the law of comparative advantage is subject to many areas of critique and in addition to whopper assumptions upon which it is based. In this context, even Adam Smith has been criticized as a poor theorist for his lack of theoretical rigor that currently exists in the neoclassical analytical tools. The neoclassical Marshallian framework faces a conundrum in offering a static framework, which at best is one of comparative statics. Adam Smith’s theory, by comparison, presents a dynamic potential that serves to overcome the static conundrum. It is arguable that the wise old Scot was perhaps the wisest of them all, after all. Adam Smith himself admitted that absolute advantage is not simply a given or fixed by the bounty of nature, but rather that absolute advantage can also be acquired.

Chapter 4, Toward a Theory of Human Value, juxtaposes the utilitarianism of Jeremy Bentham against that of the instrumentalism of John Dewey. The analysis put forth in chapter 4 in relation to the contributions of hedonic psychologists is manifest in what has come to be called subjective well-being (SWB) (Diener and Eunkoo 2000). Basically, the approach appears as an attempt to transform the subjective nature of happiness into an objective process amenable to quantitative measures that characterize a scientific methodology and analysis. This is demonstrated, for example, in the following: Subjective Well-Being: The Science of Subjective Well-Being and a Proposal for a National Index (Diener, Edward 2000). The literature in the area of SWB, which appears as an updated version of Bentham’s utilitarianism, is already large and growing.

Such a value system predicated on happiness and pleasure over pain is countermanded by Veblenian cultural economists. Utilitarianism constitutes an antithesis to the instrumentalism of the renowned philosopher, John Dewey. The focus of our analysis in this context also interrelates and includes the contribution of George Herbert Mead as a social psychologist and behaviorist in his Mind, Self, and Society (1962, 1934). In any event, the theory of human value and development that emerges from the Dewey-Mead combination is predicated on the evolution and advance of different forms of the protean self. The role played by Ayres, in the innovation of Dewey’s instrumentalism, constitutes a major contribution to the evolution of Veblenian cultural economics. According to Ayres, the science of economics is nothing if it is not a science of value. The question raised in chapter 4 becomes which theory of value is of value?

59285.png

Part 2. The Empirical—The Vicious Circle

of Megacorporate Globalization

Empirical analysis is frequently thought of as being separated from the theoretical. Part 2 combines both the empirical and theoretical. Facts, as the empirical, do not speak by themselves but require a theory from which the facts are derived and chosen. Part 2 serves to introduce the contribution of the Nobel laureate Gunnar Myrdal to Veblenian cultural economics. Part 2 essentially serves to function as a critique of neoliberalism. Myrdal’s emphasis on circular and cumulative causation is depicted in figure 1, The Vicious Circle of Megacorporate Globalization. In this circular spin starting from chapter 5, Megacorporate-Globalization: Born in the Womb of Mother Capitalism, one chapter gives rise and is interrelated to the next.

The genesis of the globalization process, as such, appears as a manifestation of mother capitalism, which had its origins during the rise of industrial capitalism and has been dated by Polanyi as having taken place in 1834. The explorations which took place during the Commercial Revolution (circa 1350-1750), to our view, do not constitute a globalization process which relates more so to a multilateral network of trade. Globalization of today relates to the rise of a multilateral network of world trade (Hilgert 1945), which came into being during the nineteenth century in the 1870s and which collapsed during the 1930s in the Great Depression. Chapter 5 also deals with the complexities of nationalism, the gold standard, and so on. Correctly dated, the genesis of our current form of globalization resides in industrial capitalism.

Chapter 6, The Commanding Heights of Neoliberal Policy: The Low Road, concerns the fallacy of relying on a self-regulating market (SRM) process which nurtures the policy of laissez-faire. This chapter analyzes the phenomenon of neoliberalism which attempts to innovate a return to nineteenth-century British economic liberalism. Neoliberalism gradually evolved from approximately the 1960s up to the Crash of 2008. Most economists appear to have conceded that neoliberalism, during this period, came to constitute the dominant paradigm as to theory and policy direction. The question relates to whether the paradigm manifests a denouement or whether it will experience a resurrection. Milton Friedman and Friedrich Hayek became the two leading academic, economic gurus, both honored as Nobel laureates, that have led the way for mainstream theory and policy. Ronald Reagan and Margaret Thatcher came to be the dominant figures to advance the far-right political agenda embedded in neoliberalism.

Policies emanating from neoliberalism have been manifest in a low road that is directed toward deregulation, privatization, outsourcing, downsizing, tax and fiscal policies that have led to greater inequality of income and wealth distribution, rising balance of payments deficits, union bashing, inadequate health insurance coverage and rising costs, pension reduction or elimination, students being fed into debtor prisons, stagnation of wages, and so on. In any event, the globalization process is guided by the paradigmatic ideological blinders and manifest in the low road. Policies of neoliberalism view labor as costs to be reduced rather than to serve as a base for investments to be enhanced and promoted. These policies have not been working, but rather constitute a gigantic cultural lag that has led to an increased immiseration for humankind in the form of a severe economic crisis and malaise that has culminated in the Great Crash of 2008.

Chapter 7, Karl Polanyi and the Globalization Debate: A Case of Déjà Vu, argues that such a laissez-faire policy orientation disembeds the social from the economic. This will predictably lead to societal fragmentation and malaise, a prediction which was achieved in the Great Depression of 1929. Chapter 7 constitutes the next nexus in our circular spin that focuses on the results which have been derived from policies orchestrated in the framework of neoliberalism.

Polanyi argued that the basic problem facing humankind took place during The Great Transformation, 1971 (1944), when laissez-faire, and an alleged self-regulating market (SRM) system and the invisible hand, took hold as the basis for policy formation. As such, the social came to be disembedded from the economic process. The results would be predictable in the destruction of humankind’s social fabric. The culprit of which related to the reliance on an autonomous, self-regulating market system (SRM). This has proved to be incompatible with a viable and functioning society. In the context of a double movement, the economic onslaught of an unregulated market process was assumed to be controlled and regulated by a SRM system which did not exist. This movement, as an acceleration of one part of culture, was resulting in malaise and maladjustment which would require the agency of institutional adjustment. In this sense, a countermovement was to provide for a catch-up to alleviate the problems of maladjustment nurtured in the dynamics of a cultural lag.

In this context, Polanyi, as with many others writing in the tradition of Veblenian economics, including Veblen himself, qualifies as a cultural lag theorist as manifest in his double movement theory. Another issue dealt with in chapter 7 is that Polanyi was not against markets, per se, but rather that he held an antipathy against a market system and an overall policy of laissez-faire in a self-regulating market (SRM) system. Also chapter 7 will provide indicators and statistics to support Polanyi’s position on societal malaise. In any event, Polanyi is rightly viewed as one of the academic giants that has written in the tradition of Veblenian economics. This conclusion is amplified in chapter 7 dealing with Polanyi, déjà vu.

Chapter 8, The Berle and Means Thesis Revisited relates to a potential positive impact of the managerial revolution. The hoped-for and anticipated response by the professional managers, as now autonomous and independent, would be to break from stock owners and their quest for profit maximization in terms of the Wall Street value system. Given the managerial revolution and the resulting power shift from the owners to professional managers, would this newly found power be used to override the values and goals inherent in the maximization of profits as previously held by the owners and supported by neoclassical theory? A possibility existed for change in the direction of reform in the separation of power from the owners of property to the professional managers.

Should the corporate leaders, for example, set forth a program comprising fair wages, security to employees, reasonable service to the public and stabilization of business, all of which would divert a portion of the profits from the owners of passive property… a scheme as a logical and human solution of industrial difficulties (Berle and Means 1948 [1932], pp. 122, 356). How could this come about? Galbraith concentrated on the power of the members of the technostructure which resided in their collective intelligence and the power of knowledge (Galbraith 1973b, pp. 81-91). Galbraith’s analysis and focus apparently rested on the power embedded in knowledge and the technostructure. Nonetheless, the current policy still being pursued by professional managers, as corporate Pharaohs, is oriented toward the neoclassical maximization of profits and, further, without social responsibility and in the context of unmitigated vengeance.

The value system as envisioned by Berle and Means and Galbraith as an alternative to the neoclassical desire for the maximization of profits has not materialized. In the neoclassical firm there was one goal—the maximization of profits (Galbraith 1973b, pp. 90, 108; Berle and Means 1948 [1932], pp. 345-351). This value system has not been vitiated by professional managers but rather has been intensified. What still governs the behavior pattern of corporate Pharaohs does not reside in the newly granted autonomy and independence for decision-making power. For corporate Pharaohs, that conditioning still rests upon a process of an institutionalization of profits without social responsibility.

Myrdal’s circular spin comes to a cumulative finality for part 2 with chapter 9, A Satanic Synthesis: A Marriage Made in Heaven or Hell. For much of the world, globalization as it has been managed seems like a pact with the devil… This is not how it has to be. We can make globalization work, not just for the rich and the powerful but for all the people (Stiglitz 2006, p. 292). Rather than having corporate Pharaohs break from the Wall Street connection, as potentially predicted by Berle and Means and Galbraith, we find that corporate Pharaohs (CEOs) still march in step to the beat of the Wall Street drummer. Myrdal’s vicious circular spin prevails in which our corporate Pharaohs end up seeking profit maximization with a vengeance nurtured in a satanic synthesis. American economic history also conflates with the history of economic thought and reveals that the robber barons and the Age of the Moguls are still with us, only bigger and worse, as manifest in our corporate Pharaohs. A Gilded Age has returned along with an associated ostentation and conspicuous consumption that is supported by growing inequalities of income and wealth distribution. The rich, in short, spend to show they can. What’s changed… is that there are so many… more rich, with so much disposable income, the job of ‘showing pecuniary strength’ has become increasingly difficult (Frank 2007, p.123). There were thirteen inhabitants of Billionaireville in 1985; by 2006, there were more than four hundred according to the Forbes publication (Frank 2007, p. 11).

How all this was spent and on what abrogates Myrdal’s American Creed that was launched by our Founding Fathers and which has been engulfed by an American corporate and elite Wall Street greed. As a result, while the rich and super rich, especially that top 1 percent, live a life in heaven and luxury, many hardworking Americans live a life in hell, intensified by the crash of 2008. This concludes our discussion of part 2 as to the ex post and the what-is of the empirical past. There is now a need to engage the ex ante and the what-ought in terms of the future. It appears that "we all know where we are, and it is not enough to know how we got here. What we want now are solutions" (Talbot 2008, p. 10, italics added).

Part 3. Policy: Toward a Human Development Strategy

Myrdal’s vicious circle is evident and appears in chapters 5, 6, 7, and 8, which end up in chapter 9, depicted as a satanic synthesis. It appears that neoliberalism resting upon a self-regulating market system and an invisible hand are not working. But if this overall disaster were all that our study concerned, it would be amiss and only be telling one-half of our Veblenian story. Veblenian cultural economics does not simply serve to focus on Myrdal’s vicious circle but also relates to Myrdal’s virtuous circle. Veblenian cultural economics not only goes beyond dissent but also serves a positive domain as assent (Klein 1994; 1993). In this positive mode, part 3, chapters 10 and 11, economic growth and development are interrelated to the goal of a concomitant path for human development and for the servicing of basic human needs. Chapter 10, Human Development and Economic Development: A Concomitant Connection, delineates and interrelates two important concepts, human development and economic development, which are in need of conceptual clarification.

Starting with economic development, how is it conceptualized in the literature? Mainstream economists assume that the concepts of economic growth and economic development are synonymous. Consequently, if a nation experiences economic growth, it is also assumed to be experiencing economic development. Therefore theories and policies related to economic growth, ipso facto, as indicated by increases in GDP per capita, are assumed to be achieving economic development. If a nation achieves a level of $45,000 GDP per capita, is this indicative not only of economic growth but of economic development as well? Therefore, why not assume that the process of economic growth is synonymous with that of economic development?

We will argue more fully in the context of chapter 10 that the growth process relates to a quantitative process as replication and reproduction; by comparison, economic development relates to a qualitative process of structural transformation and metamorphosis. For example, humankind in the development of transportation technology did not achieve speeds reaching the magnitude of 15-20,000 miles per hour by growing, reproducing more and more feet and running faster. But rather this occurred through a dynamic process of structural transformation, in the form of a series of logistic surges, as one structure gives rise to the next. For example, this appears in terms of the horse-and-buggy era, to railroads, to automobiles, to propellers, to jets, and finally to rockets. This revelation of the need for structural transformation, as relevant to the process of economic development, and measured in miles per hour, is relegated in the literature to the principle of similitude (Bell 1973, pp. 171-74).

Whereas new, mainstream growth theories exclude the social and cultural, Mydal’s conception of development includes the social, is holistic, and is defined as the "movement upward of the whole social system" (Myrdal 1968, pp. 1866-70). Myrdal was an early critic of the usage of the GDP per capita as the sole indicator of human welfare and progress. This questioning of the GDP indicator is now being turned into a potential avalanche. Major indices offer statistics indicating that while the United States is experiencing economic growth, this has not been manifest in meeting basic social needs. As a result, a major effort is now taking place to dethrone GDP as the sole indicator to measure human well-being and progress (Brinkman and Brinkman 2011). And again, all of which serves to indicate that the process of economic growth is not to be equated with the dynamic processes of economic development.

Why then is economic development to be conflated with human development? What then is meant by human development? The Human Development Index (HDI) made its first appearance in the Human Development Report 1990. The definition offered states, Human development is a process of enlarging people’s choices. The most critical ones are to lead a long and healthy life, to be educated and to enjoy a decent standard of living (Haq 1990, pp. 10, 9-16). Human development must be more than increasing wealth and income. Its concern must be people. The question becomes not simply how well the economy is doing but rather how well are the people doing? In addition to the Human Development Index (HDI) and the American Human Development Index (AHDI), other indexes also indicate that though the economy is growing, as indicated by the GDP factor, basic human needs are not being met.

In support of this conception, human development can also be viewed in the contributions of John Dewey and George Mead and relates to the advance of the protean self as a process of self-realization. Humankind’s capacity and capability have been enhanced via the dynamics of economic development. Humankind develops and evolves along with the evolution of culture. All of which has been fed by the advances in the accumulation and store of knowledge that is integral, in its application to technology, to the dynamics of culture evolution. The question becomes one of power, who has control over that usufruct of knowledge, as the core of culture, and for which purpose?

Chapter 11, America at a Turning Point: To Deny the Social Is to Deny the Solution, accordingly, starts off with the issue of power. Mainstream economics analyzes power in terms of price or monopoly power, in an economic sense, but eschews the role of political or social power. Galbraith, however, is of the view that a framework in economics that ignores the political and social aspects of power is not relevant (Galbraith 1973a). Chapter 11 relates to the meaning and conception of the nemesis of power which reigns in the locus and sovereignty of corporate America. This has led to the development of a global economy has not been matched by the development of a global society… instead there is a widespread belief that markets are self-correcting and a global economy that can flourish without any need for a global society (Soros 1998, p. xx). This phenomenon characterizes the current process of globalization which appears as a period of maladjustment and malaise. This conundrum represents a classic case of a cultural lag (Brinkman and Brinkman 2006). The cultural lag problem relates to the fact that culture does not evolve as a synchronized whole but rather that some parts of culture evolve faster than others. Veblen can be and has been classified as a cultural lag theorist. In fact, Veblen’s celebrated dichotomy appears as a cultural lag theory. This is manifest in which industrial technology accelerates faster than pecuniary or ceremonial institutions.

A raw deal has been meted out to America by the application of neoliberal policies which have nurtured paradigmatic blinders to our current societal needs. The neoliberal resolve resting on a nonexisting invisible hand is simply not working. Given that the Bush administration has marked the apogee of neoliberalism, the legacy of the Bush administration might well be manifest in the final denouement of neoliberalism. Certainly, it is not to be denied that the Great Crash of 2008 took place during the tenure of the Bush administration. Does culpability reside with individuals, for example by Bush himself or Dick Cheney (Nichols 2004) or as a trilogy demarcated by Robert Rubin, Larry Summers, and Alan Greenspan or corporate Pharaohs tied in with Wall Street elites and apparatchiks. Certainly, retribution and accountability should be administered for such acts of greed and depravity by individuals. But does fundamental culpability reside elsewhere? How to explain why potentially good individuals end up doing such bad things? We speak here of the tyranny of the bottom line (Estes 1996). That bottom line resides in a process of institutionalization of human behavior that is governed by the maximization of profits without social responsibility. Consequently, it is the current value system that is embedded in capitalism that is primarily responsible for the negative, institutionalized individual’s behavior pattern.

This primary focus, on the system being faulty rather than on the individual, also serves to explain why history repeats itself. The Great Crash of 1929 and the Great Crash of 2008 are remarkable in their similarities in cultural characteristics, such as policies oriented toward laissez-faire, anti-labor unions, income and wealth distribution becoming more unequal, and the media endorsement of optimism that all was going well, as a great illusion, prior to 1929 and 2008.

Two characteristics stand out for both 1929 and 2008, one relates to the speculative frenzy associated with the creation of paper profits, not profits derived from the economic production of goods. The other primary characteristic relates to the same economic theory as monetarism, as the keystone theory of classical economics and our current neoliberalism. The continuity of policy has not been biological in terms of the same genetic makeup of Irving Fisher or Milton Friedman as that of identical biological twins. But rather that it was in the nature of the problem of institutional continuity in social habits of thought which are hard to change. Individuals come and go in a death process. By comparison, social institutions maintain sclerotic continuity and rigidity and go beyond the lifespan of given individuals. Consequently, if the current value system is maintained, it is predictable that a Great Crash circa 2088 will appear in the future. How then to avoid such a future cataclysm?

It is becoming increasingly recognized in the literature that a theory of the economic process rests upon the advance and evolution of knowledge. Veblen was one of the first economists to directly confront the central theoretical concerning knowledge (Alperovitz and Daly 2008, pp. 17-30). Certainly, Kuznets was also concerned with the place of science in modern civilization and the impact of the scientific epoch on modern industrialism. Kuznets was of a predilection that it may be better to call explicitly for a theory of production of such knowledge as an indispensible focus for direct and continuous concern (Kuznets 1968, pp. 60-62).

This focal point on useful knowledge in its interconnection to the economic process is dealt with in chapter 11 with an analogy to a banyan tree. The Tree of Culture is directed toward the achievement of a unity of knowledge (Linton 1961). The branches of a banyan tree interconnect; whereas with an oak tree, the branches separate and are disconnected. As a result, the knowledge from one culture can be diffused and is permeable to another culture. This proclivity of knowledge will, in turn, service the origination and innovation of a social DNA. Culture serves as a store of the exponential advance of knowledge which is conflated, in turn, as a base for the ongoing advance of the human life process. As a result, cultural evolution serves as a concomitant connection as a potential for ongoing human development. Therefore, with the advance of the dynamics of culture evolution, as a store of knowledge, humankind takes bigger and bigger bites of the infinity of knowledge. All of which does not constitute a teleological process, and the application of natural law but represents the need for adjudication via human law and reason.

Humankind potentially broke through the historic bondage of economic servitude, given an emancipation with the Industrial Revolution. This was nurtured in what Polanyi referred to as the Great Transformation. However, the first Industrial Revolution disembedded the social and cultural from the economic process and as a result was not provisioning for basic human needs. Currently in order to ameliorate this cultural lag, humanity appears to be on the threshold of a crossroad, to shift from an Industrial Revolution to a much-desired and needed Human Revolution. If so, humankind would in the process engender a shift from the first Great Transformation to a conceivable second Great Transformation. This would encompass a shift from an isolated economic concern to that of an explicit human progress and well-being by engaging the social and cultural.

All of the above would result in a restructuring of capitalism from that of bad capitalism to that of the good, but still capitalism nonetheless. Schumpeter relegated capitalism to a process of creative destruction whereas our concern is with the origination and innovation of a Human Revolution that relates to a potential process of creative construction. The difference being that Henry Ford, in innovating the automobile, engaged the process of creative destruction in the destruction of the horse-and-buggy industry. This results in a change of structure, as a gestalt switch. Creative construction relates to changes of a structure directed toward enhanced technological efficiency, social justice, and reform. Consequently, shifting from the Industrial Revolution to a Human Revolution does not nurture the destruction of the system of capitalism, but seeks its reform as one of creative construction.

In agreement with Stiglitz, among others, our study is not anticapitalism nor antiglobalization but rather questions their current forms and structures that are in need of reform. These areas in need of reform will be delineated in more specific details in the course of our study. Two big areas of concern relate to number one as megacorporate power and, second, as a value system intent on a maximization of profits that are devoid of social responsibility. By comparison, Myrdal’s value system relates to an equality of opportunity and the need for a participatory democracy. To achieve these goals, there is a need to countermand American corporate greed with an American Creed as put forth by our Founding Fathers. Our study, in the context of chapter 11, ends with an assessment of the competitive preponderance that exists between the United States, China, and the European Union. From all of which, we conclude, to deny the social is to deny the solution.

This outline-overview constitutes a very cursory treatment of the globalization process as put forth in our study predicated on the framework of Veblenian cultural economics. We will now address the details and references, chapter by chapter, that are warranted in support of our holistic and interdisciplinary analysis of globalization via the dynamics of culture evolution. This Introduction: An Overview, in the desire for greater brevity and simplicity, has been devoid of endnotes. Given the need for greater detail, endnotes will now be added to the remaining chapters of our study.

Part 1

Theory—The Dynamics of Culture Evolution

Chapter 1

Corporate Pharaohs and Megacorporate Globalization:

Toward a Conceptual Clarification

The globalization process appears as a defining epochal phenomenon of the current stage of human history. In this context, has humankind been planting benign seeds in a free market, self-regulating paradigm that is leading toward progress, as neoliberals and supporters of market fundamentalism contend? Or are the processes of globalization, and its current institutional concomitants, producing anomalous results that require a clarification of the concepts and theories that are applied? In both the past as well as the present, and into the future, it is the institutional structure embedded in a given culture that determines how the elites control, direct, and benefit from the economic process. In this chapter, at the outset of our study, we address the meaning of two basic concepts integral to the whole of our analysis—the concepts of corporate Pharaohs and megacorporate globalization. The intent of this chapter is to draw an analogy between the Pharaohs of Ancient Egypt and our current CEOs, the corporate Pharaohs of American culture today. And in addition in line with the Veblenian focus on culture, that globalization is conceptualized as a process serving as an international umbilical cord of cultural