The Suicidal Corporation, by Paul H. Weaver
From Ford to Adam Smith
The Suicidal Corporation: How Big Business Fails America.
by Paul H. Weaver.
Simon & Schuster. 270 pp. $18.95.
The Suicidal Corporation is a provocative, often incoherent work that records the conversion of an avowedly neoconservative academic and business journalist into a strenuous critic of Big Government and Big Business alike. Paul H. Weaver, formerly of Harvard, the Public Interest, and Fortune, now sees American corporate history as a century-old conspiracy in which the great U.S. businesses have systematically lied about their motivations, objectives, and aspirations, and have ended by creating conditions antithetical to the survival of free enterprise. Among those who have been duped in the process are those stalwart defenders of American capitalism and Weaver’s erstwhile friends and associates, the neoconservatives.
Weaver’s journey is worth examination because, among other things, it points to a certain volatility of sentiment in some conservative circles, especially those claiming to believe in libertarian economics. A libertarian is, in fact, what Weaver claims to have become. From that perspective he now denounces U.S. economic “corporatism” (not very well defined, but akin to Italian fascism), decries the compulsive interlocking of business and legislative interests, and prescribes a sweeping reorganization of the American political and economic system to cure its manifold ills.
It is marvelous to contemplate that Weaver’s conversion to his present views was engendered largely by a stay in the corporate communications department of the Ford Motor Company, where he had gone in 1978 to fight the good fight against the retreating myrmidons of Carterite regulatory authority. Weaver wanted Ford to put up its dukes; instead, he fell into a bureaucracy intent on cowering in the corner. “The people who ran Ford Motor Company did not believe in capitalism,” he avers. Rather, they were intent on feathering their own nests and blowing whichever way the political winds were strongest. “This proud realism,” he declares, “was part and parcel of a world view in which interests and deals are real, and principles and policies are illusions.”
Weaver tells sad tales about Ford’s public-relations tactics. The automaker, for example, concealed its vulnerable financial position in the face of Japanese competition even from sympathetic government officials (there could be No Bad News). He recalls with disfavor Detroit’s flight to protectionism and bailouts (Ford failed to get one after Chrysler succeeded). In one pathetic grace note, he records how the head of Ford’s corporate communications was unable to convince his own daughter that her Pinto was safe, and in the end decided to shell out for another car.
Revulsion was followed by revelation. After leaving Ford, Weaver eventually came to the conclusion that the American corporation had never been in favor of
markets, limited government, private property, or the other values associated with the business cause. It had always tried to derive private advantage from public policy. It had never been the rock-ribbed, pro-market, straight-talking institution I had imagined.
Instead, a great cultural cleavage ran through American history. On one side, prior to the 19th century, lay the “American political tradition as we usually understand it—the world of Madison and Jefferson, market capitalism, limited government, and individualism.” On the other side stood the Great American Corporation, a revolutionary and subversive form of organization dedicated, from the time of the railroad empires onward, to the finagling of private benefit out of public policies.
As part of their strategy to achieve that goal (Weaver’s analysis continues), the founders of Corporate America invented the art of public relations, which, among other things, “reshaped the entire landscape of modern politics” by committing corporate discourse to “the language of social policy and social purpose.” That language, says Weaver, is not the language of Adam Smith but of oligopoly, cartel, regulated monopoly—or, in the modern era, of tax loophole, investment credit, pollution regulation, anything governmental that will advance corporate or industrial interests. “What business finds compelling about big government is the carrot, not the stick,” he concludes wryly.
It is amazing that we have all been duped for so long, especially since, in Weaver’s view, the situation has recently gotten much worse—bad enough to warrant the term “suicidal” in his title. In their blind pursuit of institutional advantage, businessmen have gone so far as to forget to act as a self-interested class, instead pursuing public policies on taxes, regulation, and inflation that are designed to give transient benefits to one corporation or another while undermining the competitiveness and freedom of action of business as a whole.
But we are not quite at Armageddon. If U.S. business has opportunistically dug its own grave, salvation, in the form of “true” capitalism, is also at hand. Weaver cites two cardinal events of the new era: Richard Nixon’s 1971 decision to free the value of the U.S. dollar from its postwar Bretton Woods system of fixed exchange rates, and the advent in the late 70’s of economic deregulation, led by the airlines. The floating dollar, he argues, will ultimately open all of corporate America to international competition, eroding in the process its symbiosis with public policy (no mention here of protectionism). As for deregulation, and the sweeping advantages it produces for consumers, this will help to prevent any return of the bad old days of oligopoly.
Finally, Weaver hails the arrival not just of a new economic era but of a new political era, in which weak political parties, powerful communications media, and a more porous concept of congressional discipline will lead to a new “plebiscitary politics.” As he puts it:
The new plebiscitary politics is more ideological and conflict-ridden than the old consensus-oriented interest-group system. It is often anti-institutional and anti-establishment . . . plebiscitary politics is mercurial. Policies that look good to the electorate in one concept can suddenly look terrible the minute the news creates a new context. Thus plebiscitary policy has a powerful tendency to be incoherent. It often pushes in contradictory directions.
To Weaver, all this is good news, since it will, in his view, guarantee the non-corporate or anti-corporate order of “true” market economics. Under this dispensation, organized economic interests of the old type will be unable to emerge, and the all-too-visible hand of management will be replaced by the original, invisible hand of Adam Smith & Co.
Perhaps so. But what Weaver hails as a new form of politics also bears more than a passing resemblance to an authoritarian system masked as one form or another of populism. In fact, “populist” is a far more accurate name for the position Weaver has arrived at than the “libertarian” he prefers. Like most populist analyses, his book effects an incongruous amalgam of the complaints of the individualist Right with the complaints of the “little-guy” Left, in the process offering as many tips of the hat to Ralph Nader as it does to Jack Kemp. It is also unmistakably tinged with a distaste for the customary practices of democratic politics. Though the term and the concept of “public policy” is invoked often in Weaver’s fast-forward history of corporate conspiracy, democracy—quirky, interest-ridden, promising a gradually expanding franchise—seems to have been edited out. This is an important omission, not least because the so-called free market, or democratic capitalism, is itself the product of a political decision—hence the need, from the time of Adam Smith to that of today’s neoconservatives, to argue its often seemingly illogical case.
When it comes to the steps that Weaver considers necessary in order to maintain his “true” capitalist state, the author’s recommendations range from the trivial—corporations should “Keep a Public-Affairs Diary,” or “Create a Very Senior Management Position” to oversee public affairs—to the casually drastic. To eliminate “incoherence” in public policy, for instance, he proposes such sweeping transformations as the election of members of the House of Representatives to staggered four-year terms; abolition of the two-term limit on the presidency; the folding of independent regulatory agencies into the executive branch; and reform of the tax, trade, and monetary policy processes of the executive and legislative branches. These last, he notes, “are among the most chaotic in a chaotic governmental system.”
They are, and perhaps deplorably so; but, like the other arrangements he would alter, they happen also to be constitutional. Here again one sees how Weaver’s notion of a “libertarian” commonwealth, involving the radical subordination of the current American political system to a hypothetical economic goal, partakes of the classical, and classically disturbing, features of populism. And Weaver is a populist in this sense, too: what gives shape to his discussion is not his nostrums but his frustrations. This is what endows his account with its considerable energy and bite, and what links it with other expressions of populist or anti-establishment discontent all too palpable in the country at large. But it is also what makes The Suicidal Corporation problematic as a work of serious political and economic analysis.