THE UNACCEPTABLE FACE OF CAPITALISM?
US President George Bush took time out of the G8 summit to denounce the crooked bookkeeping of Xerox and WorldCom. Bush added to the demands for corporate responsibility saying it was unacceptable to disguise losses to boost shareholder value. More trenchant critics in the US want to see independent regulation, with accountants answering to stockholders, rather than Executives. Europeans in particular are thrilled to see the 'American model' of stock-market capitalism come unstuck. Since the mid-nineties, when the US economy started growing again, the tardier Europeans have been lectured on the need to open up their markets for capital finance (more often the preserve of investment banks in Europe). Wall Streets continuing decline has put the boot on the other foot.
The purported differences between the US and European models are less important than they seem. It is a long time since individual investors played a significant role in market movements on Wall Street; rather institutional fund managers are the principle share-traders. Financial mismanagement is hardly a uniquely American phenomenon, either. The idea that there are different, even competing, models of capitalism, whether US, European or Asiatic, only indicates that there are no real alternatives to capitalism being considered. The over-emphasis upon competing 'models' of capitalism is for the most part, advertising copy in a conventional trade war.
George Bush's demands for corporate responsibility echo British Prime Minister Edward Heath's attack on the use of bribes in an attempt to takeover Lonrho: 'the unpleasant and unacceptable face of capitalism' (15 May, 1973). Heath's criticisms were meant to underscore the point that 'one should not suggest that the whole of British industry consists of practices of this kind' - and George Bush's criticisms have a similar intent.
The clamour for responsibility appears as an external force bearing down on the markets. In truth it is capitalist's own desire for respectability that is driving the demand for regulation. While conservative ideologues still press on with the eighties' programme of liberating capital from big government, some US millionaires are lobbying to have their taxes increased. When Texan oilman George W Bush joins the call for corporate responsibility, it is clear that capitalists are feeling pretty insecure with their splendid isolation, and craving the return of the nanny-state to secure their businesses on a more regular footing.
-- James Heartfield The 'Death of the Subject' Explained is available at GBP11.00, plus GBP1.00 p&p from Publications, audacity.org, 8 College Close, Hackney, London, E9 6ER. Make cheques payable to 'Audacity Ltd'