How to Recognize Capitalists and Corporatists

Jimmy Carter should meet Freddie Laker. The jolly chairman of Laker Airways could re­gale him with stories about the differences be­tween capitalists and corporatists. As a British capitalist, Mr. Laker is making heaps of money these days by transporting people back ‘and forth between New York and London at less than half the price the regular airlines charge. Freddie Laker’s determined drive of the past six years, culminating in his September 1977 low fart breakthrough, is weakening the international airline cartel called IATA (Interna­tional Air Transport Association) and is bring­ing some price competition back into ‘the business. He believes in strict government safety standards but wide-open price competi­tion in the marketplace.

Corporatists, on the other hand, reject’ Laker’s quaint beliefs. They want price security’ and if government protections can assure price-setting cartels, all the better. They want subsi­dies, tax benefits, free research and develop­ment, non-competitive government contracts, import quotas and other federal and state wel­fare supports as “incentives” to make profits. What government guarantees they lack, they try and obtain by collusive or anti-competitive practices such as price or product-fixing. Some call this welfare mentality of giant corporations in concentrated industries “corporate social­ism” and its practitioners “corporatists”!

Corporatist ideology has increasingly shaped the White House’s economic policies. The Presi­dent is supposed to stay out of the corporate economy but be responsible for its failings. His role is to provide “incentives” (read taxpayer. money) and “guarantees” (read taxpayer credit). Dozens of major corporate subsidy pro­grams and over $200 billion worth of loan guar­antees outstanding attest to the power of the corporatists’ “business confidence” test that is imposed on recent Presidents. Wall Street ex­pects Uncle Sam to stay out of its hair but line its pockets.

Major industries in this country, from steel to oil, have become masters at placing the blame on Presidents for the consequences of their mis­management, non-competitiveness or greed. Al­though the nation’s economic machine is still overwhelmingly in private corporate hands, the barons of industry and commerce make sure that governments coerce the small taxpayer and the consumer to bail them out.

President Carter has not escaped this corpo­rate strategy whose code word is “business confidence.” His State of the Union message will recognize many of the same economic poli­cies that a Ford administration would have urged.

PLAYING CATCH-UP with the powerful Business Roundtable mentality will never produce much more than costly palliatives and a demeaned presidential leadership. What Jimmy Carter needs to tell the corporate sector is to stop whining and start competing, stop milking the taxpayer and start serving the consumer, cease wallowing in waste and commence inno­vating for the real needs of people.

There was a glimpse of such thinking in the otherwise fawning remarks of President Carter on December 14 before the Business Council — a group of influential corporate executives. “I see the major redressing of our problem with unemployment being in your hands; in the private business sector. The major means’ of re­dressing the permanent underlying inflation rate lies in your hands,” Carter told them.

These words could signal a fresh approach to government economic policy. Some things the government has to do directly for the economic well being of Americans. But propping up a corporate welfare system constantly cloying at Washington is not the way to any economic solu­tions, whether intermediate or long range.

The absurdity of such cloying was reflected recently in a Wall Street Journal editorial rail­ing against “Mr. Carter’s determination to at­tack the ‘three martini lunch’ and business-related entertainment.” The Journal observed that “keeping this drop of malice in the bill will not improve the confidence of business in future economic policy.” Since when should the tax­payer in this country be required to subsidize a wholly non-meritorious technique for selling goods and services. Should “martinis” be encouraged by a tax subsidy to become a competi­tive factor in winning a sale, not to mention their shoring up business confidence?

Mr. Carter’s Council of Economic Advisers needs to be provoked with a sense of fundamen­tals about the economic structure of this coun­try and about the dislocating influence of con­centrated industries. Trying to recommend policy based on corporate-defined indicators does little to advance equity, quality or productivity in our economy. However, it does serve further to encourage unjust corporate demands on Washington.

My father once told me that the more political power corporations possess, the less economi­cally efficient and creative they become. Freddie Laker, the challenger of government-supported corporate cartels, would go along with that observation.