Saturday, January 2, 2010

Mega Giant Corporations Are Very Bad for America | Corporate Accountability and WorkPlace | AlterNet

This is a tale of globalized megacorporations gone awry. I want to say at the outset that I believe the current state of deregulated globalized megacorporations comes about because the government has been weakened to the point it cannot rein in corporate excesses. Corporations have proved over and over they cannot be counted on to behave according to enlightened self interest, instead corporations have proved over and over they are willing to lie, cheat, steal, poison, and otherwise act to destroy their customers or employees. Corporations have proved over and over they have no ethics and no compunction about anything in the pursuit of profit. This despite the fact that corporations are made up of people, people who are making the horrendous decisions that lead to unethical business practices.

The story is about Walmart - the great bugaboo hobgoblin of the progressive. I myself immensely dislike that corporation and never set foot in one despite passing by their store quite regularly (it's across the street from the Whole Foods). The story in this article just cements my opinion about them.

When you have a corporation that "delivers at least 30% and sometimes more than 50% of the entire U.S. consumption of products" that corporation holds an inordinate amount of power. Namely: Walmart.

A few years ago a pet food quality scare opened up knowledge about bad stuff in the food industry. It was learned an Ontario-based company named Menu Foods was producing a massively large proportion of all pet food sold in the U.S. They delivered pet food under at least 150 different brand names from the high-end, expensive brands like Iams and Hill’s Pet Nutrition Science Diet to more pedestrian ones like SuperValu. Then double clicking on this food source it became known that essentially all production of wheat gluten had come to be controlled by China.

It isn't just wheat gluten and pet food at issue. It's that Chinese companies have gained complete control over production of various essential product components.

The issue isn't about China, it's about the risk inherent in putting control over essential resources in the hands of any other country. For example the U.S. is entirely beholden to OPEC countries for oil imports, a fact which puts the U.S. at risk to being controlled by those OPEC countries. As was proved during the mid 1970's during the fake oil crises of that era, if a country were to control supply of vital materials, that country can wield economic warfare against other countries.

China in particular has managed to gain a really strong position over the rest of the world through control over production of all sorts of things.

For those Americans who believe in what we were taught in civics class and Econ 101, the most disturbing revelation was not even the fragility of our food systems, but that some of our most cherished beliefs about how the U.S. economy works appear no longer to be true. We are told that companies are engaged in a mad scramble to discover exactly what we the U.S. consumers want and to devise perfectly tailored systems to supply those want as efficiently as possible. We are told that our economy is characterized by constantly chaotic yet always constructive competition and that any American with a better product and bit of gumption can bring that product to market and beat the big guys.

The true situation we have is nowhere near the wide open competitive paradise we seem to have. Instead we have stores full of basically identical products whose differ only in the color choice on the labels. It's all the same crap inside each one of the products.

Until we elected Ronald Reagan president, both Democrats and Republicans made sure that no chain store ever came to dominate more than a small fraction of sales in the United States as a whole, or even in any one region of the country. Between 1917 and 1979, for instance, administrations from both parties repeatedly charged the Great Atlantic and Pacific Tea Company, the chain store behemoth of the mid-twentieth century that is better known as A & P, with violations of antitrust law, even threatening to break the firm into pieces.

Then in 1981 we stopped enforcing that law. Thus, today Wal-Mart is at least five times bigger, relative to the overall size of the U.S. economy, than A & P was at the very height of its power.

A walk down the aisles of a megastore like Walmart may make it hard to believe there is no real choice. The dizzying array of brand names and product choices certainly looks like a huge variety of choice. But the truth is that megacorporations own the majority of the brand names, they enter into fake competition between their own brands, and in any case outsourcing means the source materials behind each product is the same.

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