Recently, the ridiculous real estate company WeWork has faced intense scrutiny after their business model was absurdly overvalued and their CEO, one Adam Neumann, was exposed as an abusive boss as well as an overall crazy person. Investors from the Saudi royal family, companies like SoftBank and J.P. Morgan, and numerous venture capitalists poured vast sums of money into the company, fueling its overvaluation, which ran as high as 47 billion dollars. Unfortunately, mainstream media continues to trot out this story, as well as other famous instances of corporate fraud, corruption, and malfeasance as anomalies, aberrations. Somehow, absurd corporate business models, outright fraudulent behavior, and speculative overvaluations are seen as exceptions to the rule.
The bare truth of the matter is that various forms of fraud and cons are the rule for the vast majority of large corporations. WeWork is basically a tiny fish in the ocean when we step back and consider the scale of cons from various transnational corporations. For more recent and humorous examples, check out Current Affairs 2019 “Griftie” Awards.
All the signs of brazen criminality are in front of us. We have to do no more than look at the public figurehead of the con economy, our own president. His personality is the distillation of the elite grifter, a hollow shell of a human, heir to a fortune which has created a uniquely toxic mix of entitlement, hubris, ignorance, and malignant narcissism; a truly pathetic man molded by late capitalism, celebrity and TV culture. His wealth bequeathed by inheritance, profits acquired through real estate scandals and “university” scams; his brain is addled by a diet of fast food; and his worldview warped by utterly deluded conservative media.
For instance, the spurious idea that 1.5 trillion in tax cuts will help grow our economy through job creation, or new business ventures, is a fraud on its face, but represents an exquisite example of capitalist propaganda. This is a lie that millions of US citizens either sincerely believe or acquiesce to due to generations of mainstream media indoctrination. As for the corporate scams cited below, there are similar factors involving coercion and propaganda, and they are similarly undemocratic: the ownership class and upper management dictate narratives in the media, how the labor is done, how the con will play out, and workers carry out immoral orders against their better judgment.
For instance, take Boeing and the two tragic crashes involving its 737 Max 8 jet. The market valuation of the company fluctuates today at around 200 billion dollars, even as it knowingly and deliberately sold its newest model without the needed software updates (MCAS), as well as without the needed sensor reading and indicator light to multiple foreign airlines, and in many cases without training pilots on the new system. Now, you might think that the software needed to keep a plane from nose-diving might come standard with the purchase of a multimillion dollar passenger jet, but you’d be wrong. In its infinite wisdom, Boeing decided to not to include the computer programmed safety features, selling them for extra and deeming them “optional.” Internal Boeing emails make clear there was systemic negligence and incompetence with the implementation of the MCAS program.
Let’s take another somewhat dated example, the behemoth Volkswagen, which had a huge emissions scandal in regard to its diesel vehicles produced from 2009-2015. Volkswagen installed “cheat software” to fool emissions tests in 11 million of its diesel cars, which, when driven for real world road tests, pumped out up to 40 times the permissible amount of nitrogen oxides. Further studies with other car manufacturers showed that many other brands were also well above the allowable limit for diesel emissions. One air pollution expert confided that the added pollution in European cities would result in “thousands of deaths.” Volkswagen was forced to fork out 2.8 billion dollars to the US for their troubles. That might seem like a lot, but with 11 million cars sold in the process, and taking a guess and using a round number of $20,000 for each new car sold, it adds up to 220 billion in car sales just for these diesel automobiles.
Let’s shift to finance, a sector just filled with the most outlandish, craven, and fraudulent criminal activity. We could go on and on down the line from Bank of America to Wells Fargo to Deutsche Bank. By the way, media devoted to following the practices of these hallowed institutions have “scandal timelines” and lists of the “biggest scandals” just to help us make sense of the dizzying and insane levels of depravity these corporations have reached. One might think that encyclopedic chronologies and compendiums documenting these bank scams would shame and humble these corporations into adopting a semblance of corporate responsibility, but no.
Recently, Goldman Sachs has been in the news for their involvement in the 1MBD scandal. Haven’t heard of it? This was a massive scheme involving the Malaysian government and Goldman Sachs executives to sell billions of dollars worth of bonds to a giant Malaysian shell company functioning effectively as a Ponzi scheme, a “massive, international conspiracy to embezzle billions of dollars,” in the words of a wealth fund which was bilked in the process. Seventeen Goldman Sachs employees face charges in Malaysia, and Goldman Sachs CEO Lloyd Blankfein met with the disgraced Malaysian Prime Minister Najib Razak and the mastermind of the scam, one Jho Low, who is now believed to be on the run in China (check the Chinese wine caves?).
In all likelihood, these scandals are just the tip of the iceberg. Even if someone like Blankfein did time for his involvement in 1MBD, it might be analogous to Al Capone doing time for tax evasion. The amount of immoral criminality is staggering when one attempts to tally how many countries have been ripped off and commons privatized, how much land and assets seized, how many poor and vulnerable people have had benefits cut and prices of necessities jacked up to benefit a tiny elite, how many desperate people have died to serve neoliberal business models. These untold atrocities are barely hidden, and all one has to do is scratch the surface of our system to reveal the sordid deeds which must stay hidden for the economy to stay afloat and for public morale not to wane and stir folks to revolution. No one is ever held responsible for financial crimes under capitalism, just like our war criminals, even though the culprits roam free in broad daylight, and even though these crimes have devastating real world consequences.
No corporate media will ever acknowledge that these are just the cases we know about. What else lies under the surface? Who among us has the means and the guts to find out if the mainstream media won’t? If these companies are willing to go to these lengths to defraud their customers, there is really nothing they won’t do. If we knew the full scope of the Mafioso-like corruption and barbaric behavior of these multinationals, people might actually revolt and overthrow our inhumane capitalist system. Mainstream media thus has a distinct role, and performs excellently for the transnational corporations (TNCs), by not investigating and not pushing for prosecution of guilty parties. This “balanced” approach to news is justified in the name of being “objective,” and trying to show “both sides of the issues.”
It’s not just corporate leaders, politicians, and the media who are shirking their duties. The judicial system is just as complicit. On January 17th, the 9th Circuit Court of Appeals threw out a case (Juliana vs. United States) brought by twenty one young plaintiffs who argued that “the US government acts as a barrier to climate action” and quite rightly pointed out that “the US government [is] violating their right to life, liberty, and the pursuit of happiness by enacting policies that contribute to the climate crisis.” The majority 2-1 ruling “reluctantly concluded that the plaintiff’s case must be made to the political branches or the electorate at large.” Isn’t it revealing that these judges view the judicial system as somehow above politics?
The dissenting judge called her fellow colleagues out for their cowardice:
It is as if an asteroid were barreling toward Earth and the government decided to shut down our only defenses. Seeking to quash this suit, the government bluntly insists that it has the absolute and unreviewable power to destroy the Nation…my colleagues throw up their hands, concluding that this case presents nothing fit for the Judiciary.
Here we can clearly see the Kafkaesque institutional evasion of responsibility. Everyone in these elite institutions is to blame, so no one can be blamed, for it risks exposing the system as the root cause. In the West, we are stuck in a time where no one accepts a public duty to do anything regarding climate change, corporate criminality, etc. As Mark Fisher succinctly explained in Capitalist Realism:
The supreme genius of Kafka was to have explored the negative atheology proper to Capital: the center is missing, but we cannot stop searching for it or positing it. It is not that there is nothing there – it is that what is there is not capable of exercising responsibility.
As Fisher and others have shown, the lack of responsibility taken and lack of corporate and governmental transparency, and lack of differentiation between the corporate, judicial, legislative, and media bodies is a defining feature of late capitalism. We can view the contours and delineate between the modern and postmodern periods, in terms of the sea change from a Foucauldian disciplinary society to a Deleuzian society of control. In the modern period, there were bounded, separate domains of work, home life, recreation, public and private, etc. In our late-stage dystopia, it becomes exceedingly obvious that “all that is holy is profaned,” for instance, judges (supposed impartial arbiters of fairness and democratic values) who are supposedly duty-bound to uphold basic issues of social, environmental, and economic justice, yet do not have the temerity to overturn the death-grip fossil fuel multinationals have over our country.
Whereas before disciplinary action – punishment and jail time – could act as a bit of leverage to limit outright corporate crimes, now we have interconnected, networked, embedded elite coteries who can no longer be distinguished as serving private or public functions: the “revolving door” phenomenon. Today, our elites also cannot distinguish or internalize their own actions and take responsibility for them. Internal checks could at least possibly prevent catastrophes, or lead to feelings of shame and regret for past actions in the old-fashioned, modern way. For this reason, we can view someone like Robert McNamara as perhaps the last modernist public servant in the old-school disciplinary age. His actions were unconscionable, but it is well known he at least regretted his part in the Vietnam War afterwards. The bizarre but true story of McNamara almost getting thrown off a ferry to Martha’s Vineyard in deep ocean in 1972 by an enraged anti-war citizen with family who had served in Vietnam confirms this. Afterwards, McNamara refused to press charges, making clear he knew on some level he deserved punishment.
On the contrary, take the figures of Bush, Cheney, and Rumsfeld today. They are insulated by layers of ideology (and bodyguards), inebriated by luxurious lifestyles and sycophantic think tanks who parrot their every word, and interwoven within the framework and institutions of imperialist and conservative power who no longer have the capacity for self-reflection. Their perceptions and self-image, in other words, are managed by a network of power, control, and domination, in this example the interests of the national security state. Figures such as Bush, Obama, and Trump operate under the aegis of the capitalist/imperial postmodern society of control, which has continually formulated, modulated, subdued and attenuated any tension, any tendency to self-doubt, or any capacity to think critically and examine the atrocities committed by their orders.
It is a world where instantaneous feedback can assuage and soothe the troubled nerves of the elites, by providing media and/or classified reports that justify their grotesque barbarism in real time. We can observe this on a smaller scale when examining how social media algorithms create echo chambers and polarize those with opposing belief systems. The type of worldview our war-criminal presidents are subject to is a “higher immorality” as C. Wright Mills put it. It was best summed up by an unnamed senior Bush regime official, supposedly Karl Rove, speaking to journalist Ron Suskind:
People like you are still living in what we call the reality-based community. You believe that solutions emerge from your judicious study of discernible reality. That’s not the way the world really works anymore. We’re an empire now, and when we act, we create our own reality. And while you are studying that reality—judiciously, as you will—we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors, and you, all of you, will be left to just study what we do.
The commonality between all these absolutely absurd scams is that, unlike the relatively small size and bumbling ineptitude of a WeWork, the fetishization of and overvaluation of hare-brained tech with a company like Theranos, the pyramid scheme of a Bernie Madoff, or the cooking-the-books accounting of an Enron, companies such as Boeing, Volkswagen, and Goldman Sachs form the commanding heights of the world economy. These are supposedly the bona fide, respectable “blue-chip companies” which many middle class investors look to for stable, steady growth of their wealth. These companies and their corporate owners cannot clearly view “reality,” (who can? but still) and the public is simply “left to just study what they do.”
Another aspect is the proliferation of marketing and advertising, which hypnotizes the middle classes, which in the West are approaching comatose status in regards to the scale of these interlocking crises of corporate greed and climate disruption. Abject submission and conformity are the key features of the professional-managerial class, who hype new trends and fads, and even business models (such as WeWork). Pharmaceutical companies spend more on advertising than research and development, which lead the most sycophantic employees to top positions with deadly repercussions (for example, in the Vioxx scandal) and leads to modern pharmacological advances being in many cases guided by snake-oil peddling quack researchers and their corporate overlords.
Individuals, as well as our artistic preferences, and urban spaces, increasingly are modulated by these corporate structures, leading to a flattened consumerist aesthetic. In a brilliant essay, Andru Okun explains using quotes from author Oli Mould:
As Mould argues, ‘Neoliberalism is about the marketization of everything, the imprinting of economic rationalities into the deepest recesses of everyday life’ … [Mould] posits that 21st-century capitalism, ‘turbocharged by neoliberalism,’ has co-opted the conceptual framework of creativity in the interest of endless growth. Even movements interested in destabilizing capitalism can be ‘viewed as a potential market to exploit,’ subsumed by the very world they seek to transform. ‘Creativity under capitalism is not creative at all… it merely replicates existing capitalist registers into ever-deeper recesses of socioeconomic life,’ writes Mould.
This form of “imprinting” becomes clear when examining the professional-managerial classes and the petit-bourgeois class. Class locations, as Erik Olin Wright pointed out, invariably determine the psychological states of the middle classes, who exert exploitative pressure upon their subordinates as well as pressure from above. When advances and promotions are made within the confines of the professional class structure, one can view the accommodation to capital with near-empirical precision: “Individual consciousness is related to position within the class structure. That is, the attitudes and behaviour of individuals has a connection to the location they occupy within the division of labour and the contradictory locations that exist in capitalism.” Thus, Mark Fisher explains how the individual actions of managers to change corporate culture are futile:
The delusion that many who enter into management with high hopes is precisely that they, the individual, can change things, that they will not repeat what their managers had done, that things will be different this time; but watch someone step up to management and it’s usually not long before the grey petrification of power starts to subsume them. It is here that the structure is palpable – you can practically see it taking people over, hear its deadened/deadening judgments speaking through them.
Again, the activities of these huge conglomerates which dictate the global economy, public discourse, and private and individual aesthetic preferences are not exceptions; they represent the rule when it comes to the behavior of TNCs and international finance. Scamming is what they do best, whether by illegal software or the TV commercial, and the scam-ees quite often turn out to be other elite venture capital and banking firms hoodwinked by the allure of profit no matter the unseemly source or the ridiculousness of the business model. Climate denialism is also a very profitable scam for its elite adherents in the fossil fuel industries and the media, one that plays a key role by influencing public opinion just enough to convince judges, politicians, and CEOs that nothing can be done within their hallowed institutions.
The assertion I’ll lay out here, and it’s admittedly not a particularly original or insightful one, is simply that the falling rate of profit as we approach what we might call terminal-stage capitalism has convinced these TNCs to slightly adjust their calculus. The adjustment is to supplement the neoliberal grip on power with the brazenness of the scam.
The neoliberal era, stretching from approximately the mid-1970s until now, can be defined quite rightly by David Harvey as being driven by a process of “accumulation by dispossession.” In his brilliant 2004 essay “The New Imperialism: Accumulation by Dispossession”, Harvey explains the four main policies which drive this process as privatization (selling out the commons to private interests), financialization (the penetration of all parts of the economy by banks, loans, institutions such as the IMF, World Bank, the WTO, excessive debt, etc), management and manipulation of crises (for instance, see Naomi Klein’s The Shock Doctrine), and state redistributions (huge subsidies and contracts for the fossil fuel and military-industrial corporations, “socialism for the rich”, as it were).
Perhaps today we can add a fifth category: accumulation by the scam. If a Volkswagen or Boeing or Goldman Sachs stands to make hundreds of billions of dollars by swindling their customers, and can somewhat accurately guess that the level of future fines will be small or negligible; that lobbyists can protect future interests; that their teams of corporate lawyers can derail federal investigations; that federal regulators will be hamstrung due to lack of expertise, power, and/or resources; and that their customer base and supply chains will remain relatively stable, there is more of an incentive to cheat than ever before.
If the gravediggers of capital ultimately end up being a united working class, and/or the ecological crises combined with global warming-induced climactic Armageddon, perhaps it’d be helpful to think of these corporate grifters as the grave robbers, exhuming and reanimating whatever scam du jour they deem necessary to circulate capital. Not only does this reliance on fraud betray the moral failings of the people and institutions implicated, but it reinforces that Marx was right: the falling rate of profit over time and over-accumulation continues to force new methods of creative destruction to enter our midst to necessitate continuous expansion. Neoliberal economics officially saw its death-knell during the 2008 recession, but twelve years later this undead ideology maintains hegemony in a world teetering on the brink of disaster. Zombie Economics, if you will.
Profit and GDP growth at all costs to line elites’ pockets and increase national tax bases is killing the planet and working classes. Put another way, from a humorous statement by @Anarchopac on twitter: “The problem with capitalism is eventually you run out of planet to destroy to maximize short-term profit.” Put yet another way, John Maynard Keynes pointed out: “Capitalism is the extraordinary belief that the nastiest of men for the nastiest of motives will somehow work for the benefit of all.”
In our late capitalist reality, there are barely any new frontiers to shift capital and production to, and the possibility of opening new markets in underdeveloped nations is also limited. The colonialist frontiers have been tapped and the system begins to cannibalize itself. A rentier economy coalesces and the contours of a neo-feudal regime based on debt and precarity are readily apparent now. Speculation and passive income from the FIRE sectors (Finance, Insurance, and Real Estate) are near all-time highs, but their assets are so overvalued that sooner or later it will spur on an economic downturn that at this point is unavoidable. Consider, for instance, that the Dow Jones at its low point in March 2009 stood at around 6,600. Here in 2020, we find the average hovering over 29,000. No one can legitimately say that our markets or average families are four times as well off or any more resilient and economically secure than ten years ago. The next crash could very well make terms like “housing bubble” and “tech bubble” seem quaint. The entire US economy is a bubble, a rigged casino designed to implode.
Since financial, real estate, and stock speculation has in some sense reached a tipping point of limited returns on investment, our hypothesized 5th category, accumulation via fraud, is implemented. It fits into our upside-down world nicely: since what is productive for one class is often unproductive for another, one-percenters elide reality to maintain their own class interests at all costs, and block any real public discussion in the media of what constitutes productive versus unproductive labor. The masters know what is good for us. Capitalist elites see no moral qualms in the most debased forms of wealth acquisition. It’s all relative to them, and where previous Taylorist models focused on planned obsolescence of products, now we construct products that do not even work initially; i.e., jets that literally fall out of the sky without the necessary software updates.
In all likelihood these examples are just harbingers of things to come, as the structural instability of capital demands new avenues for expansion even as it teeters before the inevitable collapse. The brazen criminality and fraudulence of the system bubbles to the surface and can no longer be rationalized away as an “aberration.” As real material conditions deteriorate for the multitudes, resistance to capitalism must intensify as it enters its final death throes.
<p class="postmeta">This article was posted on Tuesday, January 21st, 2020 at 12:05pm and is filed under <a href="https://dissidentvoice.org/category/capitalism/" rel="category tag">Capitalism</a>, <a href="https://dissidentvoice.org/category/corporate-globalization/corporate-finance-criminality/" rel="category tag">Corporate/Finance Criminality</a>, <a href="https://dissidentvoice.org/category/justice/courts-and-judges/" rel="category tag">Courts and Judges</a>, <a href="https://dissidentvoice.org/category/donald-trump/" rel="category tag">Donald Trump</a>, <a href="https://dissidentvoice.org/category/economics/economic-inequality/" rel="category tag">Economic Inequality</a>, <a href="https://dissidentvoice.org/category/asia/malaysia/" rel="category tag">Malaysia</a>, <a href="https://dissidentvoice.org/category/neoliberalism/" rel="category tag">Neoliberalism</a>, <a href="https://dissidentvoice.org/category/opinion/" rel="category tag">Opinion</a>, <a href="https://dissidentvoice.org/category/ruling-elite/" rel="category tag">Ruling Elite</a>, <a href="https://dissidentvoice.org/category/environment/the-commons/" rel="category tag">The Commons</a>, <a href="https://dissidentvoice.org/category/united-states/" rel="category tag">United States</a>.