Whoever dies with the most toys wins!
a rant by Tim Vasquez


"Antisocial behavior in pursuit of a product is a good thing."
-- marketing consultant at Florida seminar, 1994, documentary film Affluenza
        The United States and many western countries are seeing an assault of mass marketing on an unprecedented scale. The success of corporations and the nation as a whole are measured only by an increase in profits, and the "normal" person is encouraged to amass as much wealth and pleasure as possible.
        The reality? Corporations are earning record profits and downsizing the workforce, Americans are spending more hours at work than ever, and the legislative process has become dominated by big business interests.
How do I know that I've been affected?
  • You wonder why your neighbors always need the latest status symbols
  • You feel you're working harder for less compared to 10 years ago
  • Film critics seem to be pushing big-budget films that you don't like
  • Advertising seems to be out of control
  • You wonder why the news constantly dodges "real" issues
  • You or a friend have been laid off because of "downsizing"
Consumerism         Consumerism is an addiction to satisfying one's needs through material things. Corporate power is rooted in consumerism because consumer demand now accounts for two-thirds of all U.S. economic activity. We have reached this syndrome partly because Americans are exposed to hundreds of advertisements each day, and from early age television and films have taught us to associate success with new and expensive items, as opposed to useful and practical items. It has taught us that products can replace healthy social contact with others. One conservative estimate has indicated that the average American uses 30 times the goods of an average third-world resident.
        Consumerism is rooted in the suburbs. It was the automobile, cheap gas, and sprawling road networks that encouraged people to move to the suburbs. Naturally more roads meant more asphalt and sewer lines, and the absence of local services meant a need for lawnmowers, washing machines, air conditioners, and so forth. It was growth that was good for the economy. However the trend has gradually spiralled out of control. We now seek ergonomically-styled toothbrushes. Parents make frenzied trips from one McDonald's restaurant to another in pursuit of the latest gimmick toy. Highly expensive SUV's comprise 15% of all new vehicles sold, yet many of them are simply used for one person to commute to and from work. Parents take on second jobs to get that third vehicle or that new computer system. Where does it end?
        Consumerism is further encouraged through the use of credit cards, loans, and other instruments of debt. According to the Federal Reserve Board, total consumer debt in early 1999 rose to $6 trillion, with $1.4 trillion spent on credit card purchases and $4 billion of this overdue. Personal savings slowly dropped from $210 billion in 1993 to -35 billion (debt) in early 1999 (FRB, 1999). Over one million bankruptcies were filed in 1996.
What is overconsumption?         Overconsumption is the shadow of consumerism, touching into environmentalism because of the vast amounts of land, power, grain, paper, fertilizer, plastics, fossil fuels, etc that corporations must use to satisfy consumer demand. Consider that America, with only 6% of the Earth's population, currently consumes 30% of the Earth's resources. While some of this consumption is not harmful, a variety of corporations taps into resources that are not infinite or taps into them in harmful ways. This has given rise to environmental activism.
Corporations -- the need to increase profits         During the early years of the United States, corporations were only granted charters for public purposes. They had limits of existence, land, capitalization, and liability protection. Over time, however, state corporate law authorized the creation of "for profit" corporations, and gradually corporations were allowed to avoid societal obligations or responsibilities. In 1886 the US Supreme Court set a precedent in Santa Clara County vs. Southern Pacific Railroad by ruling that a private corporation was a "natural person" under the US Constitution, subject to due process under the 14th Amendment. Rather than being accountable by law to the public, corporations are now only accountable to their stockholders. The Economist reported that in several key industrial sectors, the top five corporations control more than 50% of the global market. In the oil, computer, and media industries, the top five corporations control more than 40% of sales. This is what is referred to as a monopoly.
        In the ideal market envisioned by economists, there are few barriers to entry and there is considerable competition among sellers. Competition keeps profits at normal levels and properly allocates resources. Yet the largest corporations now dictate the direction of global business. One percent of all multinational corporations now own half the total stock of foreign direct investment. In short, a few of these corporations are consolidating their hold on the global economy. Allowing this kind of control over the global economy has dire effects on local economies. In both the U.S. and across the globe, many large corporations, either directly or through intermediaries, are obeying the implacable logic of capital by creating barriers to entry, stifling local economies, and racing to liquidate finite resources.
Crime #1: Externalizing costs Externalized costs are broadly defined as costs that are shifted from the sellers and the buyers to third parties. They can take on the form of government subsidies, pollution of local watersheds, and layoffs. Costs externalized globally are especially dangerous because the corporation can avoid accountability. By packing up a factory and moving it from one country to another, the corporation avoids liability.
Downsizing. An externality that has hit Americans hard is "downsizing", a euphemism for "mass firings" throughout a company's workforce. While this is occasionally done to restructure a mismanaged company, it is more often done because corporations realize that profits can be increased by shutting down profitable factories, laying off employees, and shifting production to third-world countries. This is often done even when the corporation is profiting. Labor and production contracted to third-world countries is profitable because workers receive dismal wages, often in sweatshop conditions. In a well-known scandal it was found in 1997 that Nike's Indonesian factory workers adhered to 12-hour shifts 28 days per month to produce shoes for $5 at retail costs of $140, paying wages as low as $25 per month (TRAC, 1997). Corporations such as Wal-Mart, Disney, K-Mart, J.C. Penney, Esprit, May, Guess, and Victoria's Secret have also come under scrutiny for allowing subcontractors overseas to violate the labor rights of local workers. In 1995 when Wal-Mart's line of 'Kathie Lee' clothing was found to have been sewn in Honduras by children in apalling conditions, Wal-Mart promptly relocated much of its contracting to neighboring Nicaragua, where wages also were low.
GATT. The General Agreement on Tariffs and Trade (GATT), created by the Bush and Clinton administrations, prohibits penalties for goods produced under substandard labor conditions and prohibits penalties for goods made under environmentally damaging conditions. Both of these policies encourage corporations to seek out the cheapest production cost regardless of human or ecological impact. One would hope that GATT could rescind these policiies, ultimately prohibiting projects that exploit local economies.
Corporate welfare. The American government-business relationship is well-institutionalized. To some extent, subsidies have helped cash-strapped corporations spawn new inventions and become internationally competitive. However subsidies are being flagrantly abused, much to the ignorance of legislators, and corporations are receiving tremendous tax breaks and subsidies. This will be dealt with in a separate section below.
Crime #2: Corporate propaganda         People actually remember few ads, but they do have an effect. Their purpose is to manipulate us so that we consume goods or services with as little reflection as possible. Even if they fail to sell a product, they sell consumerism by appealing to our insecurities and reminding us there's a solution to a problem if we buy it. Other advertisements encourage us to buy their products to pursue the happiness and freedom we supposedly crave at the expense of community and family life. And with 30-second prime-time network advertising priced at over a quarter of a million dollars, only the wealthiest corporations can afford it. The largest 100 corporations in the U.S. pay for 75% of commercial television time. Mass advertising has begun infiltrating public schools, with 8,000 secondary schools now contracted with network Channel One.
        Advertising works to restrain our distastes. The proliferation of the automobile is widely regarded as one of the biggest threats to the environment, however it is noteworthy that most car advertising makes extensive use of natural backgrounds, making it appear that the vehicle is at home in nature as they serenely cruise by pastures or up winding dirt roads.
        Crossmarketing, the simultaneous marketing of two products, ties the latest blockbuster films to fast food and toys, reminding us that the feelings we associate with one product can also be answered by the other product.
        Advertising carefully crafted and targeted at children translates into tremendous pressures on parents. Parents who give in to the consumerism craze are the ones driving frantically from store to store to find their children the latest craze, be it Beanie Babies or Tickle-Me-Elmo dolls.
Anonymizing goods. Economics books teach us that in an ideal economy, a buyer will research a product, its properties, and where it came from. For globally-manufactured items, the problem, again, is GATT, which states that only the country of origin must be declared, not the country of manufacture. What the consumer knows beyond price and appearance is dictated entirely by corporate imagemakers.
Suppressing criticism. Since a product's image and marketing are critical to earnings, various corporations draw on their net worth to bully smaller businesses and individuals that present harmful objective information related to their products. For instance, corporate-friendly courts and libel laws in the United Kingdom have allowed McDonalds to silence nearly all of its critics since 1984.
Media is pawned. Twenty years ago, a television producer might have said, "We can't air that; our advertisers will kill us!" The same may be true now, but producers have much more to fear from their parent corporation. Nowadays a large number of media outlets are owned by Fortune 500 companies such as Time-Warner, Gannett, and Disney. It is in the interest of these corporations to set policies for news operations and entertainment programming that hide consumerism and corporate power issues. This is done by encouraging objective reporting on a limited set of public issues, which puts the burden of interpretation on mostly uninformed and indifferent Americans, by allowing unrestrained access to the media by advertisers, and by touting corporate hype as legitimate news (such as press releases and reports on the latest blockbuster film).
Crime #3: Political interference Consumer advocate Ralph Nader once said, "Washington is a federal forum whose operating slogan is 'Billions for corporations, bills for people'" (Danaher, 1997). The lobbying organizations we learned about in high school textbooks have largely been superseded by "public interest" groups. They exist to convince members of the public that the corporate interest is their interest, and their efforts are often combined with lobbying organizations that give legislators the apperance of full all-around support. This is backed by corporate public relations, which often encourage citizens to organize letter writing campaigns on behalf of corporate interests
Corporate tax privileges. Tax policies have been shaped in ways that give corporations greater latitude in getting tax write-offs for all corporate "crimes" (externalized costs, propaganda, and political interference). For example, a corporation's advertising expenses are deductible, its lobbying expenses are deductible, and its litigation or arbitration expenses are deductible. For American citizens, campaign contributions are not deductible, and legal expenses are not deductible.
Third party alternatives. Third parties in the U.S., which have the desire to dismantle the corporate power engine, are consistently shut out by Democrats and Republicans. Voters are given few alternatives to these two parties and must frequently resort to write-ins at the voting booth. Libertarian, Green, and Natural Law parties are given very little attention by the media and are not permitted fair participation in the Presidential debates.
Election requires big money. Campaigns are very expensive and now must be backed by big business to survive, or as in the case of Ross Perot and Steve Forbes, must be backed by personal wealth. Needless to say, this makes politicians the pawns of their financiers, forcing them to constantly make concessions to big business. If a bill could be enacted that prohibits corporate contributions, money will no longer dominate public policy and corporate accountability will be taken more seriously.
        The government, representing the voice of the people, must set laws and bounds for the corporations. Public policy set by corporations, a trend which was prohibited during the first hundred years of our nation, is probably the worst threat to democracy and individual rights as we know it.
Measuring success         Our measure of success has been tainted by the dogma that prudence and judgement is bad, while consumption is good and helps to build the economy. The yardstick for success has been the Gross National Product (GNP), a measure which supposedly measures our nation's success by adding the total market value of all goods and services produced in the U.S. for a given year. The problem is that this yardstick treats the earth as a business in liquidation. Corporations get depletion allowances for draining oil wells, overfishing shows up as a rise in the GNP, cleanup efforts after a major oil spill (such as the Exxon Valdez) create a rise in the GNP, and the goods produced by extensive logging are reflected as an economic boom. Even when you get into a wreck on the freeway, the money spent by you and your insurance company on goods and services creates a rise in the GNP. The government needs to develop other measures of progress, such as social trends, rather than measuring economic activity.
Aside: Corporate welfare         Once upon a time local communities looked to corporations not only for jobs, but for tax revenues to create infrastructure and public services. The situation has largely reversed. In 1957, corporations in the United States provided 45 percent of local property tax revenues. By 1987 their share had dropped to about 16 percent. Many of the largest corporations pay no federal taxes.
        Another contributing factor is corporate welfare, which consists of bailouts, export promotions, loans, loan guarantees, debt forgiveness, below-cost sales, farm (agribusiness) programs, and interest-free financing. In 1994, U.S. corporations received $104 billion annually in tax breaks, while by contrast aid to needy families amounted to only $14 billion.
        It is in the interest of corporations to shift as much of the operation cost as possible onto communities, which unfortunately see themselves as responsible for wooing big business. For example, German automaker Daimler-Benz played Alabama and South Carolina as pawns against one another, receiving free land and millions of dollars in outrageous and fiscally irresponsible handouts from the state of Alabama and South Carolina.
        Some recent examples of corporate welfare:
  • In 1994, Texas Instruments got a $13 million handout from the Defense Department's Technology Reinvestment Project, used towards research and development of "Field Emissive Displays" used in televisions and computer monitors.
  • Up until 1991, Bristol-Myers Squibb had been handed $32 million to develop Taxol, an anti-cancer drug. Bristol-Myers Squibb then sold it at $1,320 per month, a production cost markup of over 600%.
  • In 1992, Sunkist Growers received $10 million from the U.S. Department of Agriculture to advertise its products abroad.
  • In 1995, the U.S. government paid $100 million in bonuses to top executives of Lockheed and Martin Marietta for successfully completing a merger.
  • Plans to slash corporate welfare have gained little support in the Republican-controlled Congress and have gotten virtually no coverage in the national press. Meanwhile corporate PAC money flows into the pockets of Congressmen in unprecedented amounts.
  • In 1990-94, a year with $4.7 billion in profits, GM received $111 million in federal technology subsidies, while laying off 104,000 workers (25% of its workforce).
Summary         Our "free market" economic system shuns ethical, pragmatic corporations. Only those corporations that convince people to buy what they do not need (propaganda), favor those who shift costs on communities and governments (external costs), and help shape public policy in ways that forces us towards their products and into overconsumption (political meddling) are the ones that reap large profits at the expense of our quality of living.
        On the global scale, corporate wealth soaks third-world countries of wealth, forcing residents into poverty. A common myth is that world poverty is the result of a global food shortage, but current production summaries show that we have the ability to feed 5 billion people 2500 calories per day. According to Forbes, the world has 358 billionaires. Their combined net worth of $760 billion exceeds the combined net worth of the world's poorest 2.5 billion people. This is a reflection of the extreme economic and social distortions created by large corporations.
        In summary, it is the unsatiable American consumer appetite, the unequal distribution of resources by corporate wealth, and exploitation of third world nations that has resulted in the situation we see today. Lewis Mumford noted that six of the seven deadly sins have been transformed into virtues: Greed, avarice, envy, gluttony, luxury, and pride. Only "sloth" remains.
Solutions What can you do? It doesn't require a lot of time, money or effort. It's just adopting a few simple changes to your lifestyle from the list below. We can all make a difference!
Adopt voluntary simplicity. This involves finding a new balance in life between the "old days" and your neighbors' mindless consumerism.
Avoid multinationals. Avoid national retail and food chains, and shop instead at locally-owned stores or local chains. You may pay a little higher, but your money will be better spent.
Choose products you wish others would buy. It starts with you. Skip products with excess packaging. Choose organic vegetables and fruits at the grocery store. And try to let the store know your views (a fax is quick and non-confrontational).
Research. If you invest, research corporations you invest in. Unethical multinationals should be avoided.
Don't buy into marketing. Instead of pacifying your child with the latest marketing gimmick, find clever toys that will provide hours of fun over the long run.
Mass transit. Adoption of mass transit is a key to ending the influence of corporate power. If you think you could use mass transit, demand it from your local representatives. Don't take no for an answer.
Circumvent advertising. Make unyielding use of your television mute button during commercial breaks. (Why won't they make a video mute or a timed mute?)
Eliminate debt. Eliminate all unnecessary credit cards, which encourage indebtedness and consumption beyond one's means. Use ATM cards where possible (debit cards carry more risks with theft than credit cards do).
Support a third party. Instead of staying home or picking the same old politicians, find an independent party you like and vote for their representatives.
Education. On your web site, spout off on consumerism and corporate power. Shame legislators and commissions that give handouts to big business. Tell others. Word of mouth really works.
Support "Buy Nothing Day". The next day is on November 26, 1999. See Adbusters for this and great posters to spread the word. It may not put a dent in corporate earnings, but it will certainly raise awareness.
Discover the outdoors. Satisfaction doesn't have to come from products, programming, or services. Spend your weekends biking, hiking, or fishing.
Bills that would end the madness These are bills that you should look for. Ask your representatives to introduce these bills, and if they are in debate, show your support for them!
  • Bills that prohibit political advertising on television. TV political ads are far more often misleading than informative, extremely expensive, discredit the political system, and give money inordinate power in deciding elections.
  • Bills that place strict limits on individual campaign contributions. The principle of democracy is one person one vote, not one dollar one vote
  • Bills that strip corporations of their "human rights" by a) getting them out of politics through bans on lobbying and contributions; b) revoking the charters of harmful corporations; and c) rewriting and amending state corporation codes based on the principle of citizen sovereignty.
  • Bills that strip corporations of their self-serving agendas by a) capping salaries of executives or tying them to employee compensation; b) making corporations pay out their profits each year to their shareholders; and c) allowing communities to buy out corporate assets on preferential terms after a fixed time or when a factory is closed (or layoffs occur).
  • Bills that strip corporations of their tax exemptions by a) eliminating all corporate welfare; and b) eliminating tax deductions at the federal level on advertising in schools.
  • Bills that eliminate the concentration of media ownership. Did you know your local TV station is likely owned by a large corporation? Strict anti-trust provisions are needed prohibiting any single individual or corporation from owning more than one major electronic or print media outlet.
  • Bills that initiate highly progressive income and consumption taxes on levels of income and consumption above those required to comfortably meet basic needs.
  • Bills that invoke taxation of inheritance and trust income at the same rate as any other income to avoid creating a perpetual privileged class and provide an incentive for the offspring of wealthy families to make their own creative contribution
  • Bills that invoke a reduced workweek to allocate available paid employment equitably.
  • Bills that take back the corporate charter. Citizen action should allow charter withdrawals from corporations that demonstrate disregard for the law or otherwise fail to serve the public good.
  • Bills that tie school funding to statewide tax with standards of equity between districts and a minimum funding guarantee. This would eliminate the "poor school" and "rich school" paradox.

GREAT WEB SITES

REFERENCES

Henley, Bob, 1997: Capitalism's roots are greener than you think. Synergy Online,

Danaher, Kevin, ed., 1997: Corporations Are Gonna Get Your Mama : Globalization and the Downsizing of the American Dream, Common Courage Press, 224 pp.

FRB, 1999: Flow of Funds Accounts of the United States, June, 1999.

TRAC, 1997: Exposing Nike's Sweatshops, Transnational Resource & Action Center.