JOHN GALBRAiTH

A cloud over civilisationCorporate power is the driving force behind US foreign policy - andthe slaughter in IraqJK GalbraithThursday July 15, 2004The GuardianAt the end of the second world war, I was the director for overalleffects of the United States strategic bombing survey - Usbus, as itwas known. I led a large professional economic staff in assessment ofthe industrial and military effects of the bombing of Germany. Thestrategic bombing of German industry, transportation and cities, wasgravely disappointing. Attacks on factories that made such seeminglycrucial components as ball bearings, and even attacks on aircraftplants, were sadly useless. With plant and machinery relocation andmore determined management, fighter aircraft production actuallyincreased in early 1944 after major bombing. In the cities, the randomcruelty and death inflicted from the sky had no appreciable effect onwar production or the war.These findings were vigorously resisted by the Allied armed services -especially, needless to say, the air command, even though they werethe work of the most capable scholars and were supported by Germanindustry officials and impeccable German statistics, as well as by thedirector of German arms production, Albert Speer. All our conclusionswere cast aside. The air command's public and academic allies unitedto arrest my appointment to a Harvard professorship and succeeded indoing so for a year.Nor is this all. The greatest military misadventure in Americanhistory until Iraq was the war in Vietnam. When I was sent there on afact-finding mission in the early 60s, I had a full view of themilitary dominance of foreign policy, a dominance that has nowextended to the replacement of the presumed civilian authority. InIndia, where I was ambassador, in Washington, where I had access toPresident Kennedy, and in Saigon, I developed a strongly negative viewof the conflict. Later, I encouraged the anti-war campaign of EugeneMcCarthy in 1968. His candidacy was first announced in our house inCambridge.At this time the military establishment in Washington was in supportof the war. Indeed, it was taken for granted that both the armedservices and the weapons industries should accept and endorsehostilities - Dwight Eisenhower's "military-industrial complex".In 2003, close to half the total US government discretionaryexpenditure was used for military purposes. A large part was forweapons procurement or development. Nuclear-powered submarines run tobillions of dollars, individual planes to tens of millions each.Such expenditure is not the result of detached analysis. From therelevant industrial firms come proposed designs for new weapons, andto them are awarded production and profit. In an impressive flow ofinfluence and command, the weapons industry accords valued employment,management pay and profit in its political constituency, andindirectly it is a treasured source of political funds. The gratitudeand the promise of political help go to Washington and to the defencebudget. And to foreign policy or, as in Vietnam and Iraq, to war. Thatthe private sector moves to a dominant public-sector role is apparent.None will doubt that the modern corporation is a dominant force in thepresent-day economy. Once in the US there were capitalists. Steel byCarnegie, oil by Rockefeller, tobacco by Duke, railroads variously andoften incompetently controlled by the moneyed few. In its marketposition and political influence, modern corporate management, unlikethe capitalist, has public acceptance. A dominant role in the militaryestablishment, in public finance and the environment is assumed. Otherpublic authority is also taken for granted. Adverse social flaws andtheir effect do, however, require attention.One, as just observed, is the way the corporate power has shaped thepublic purpose to its own needs. It ordains that social success ismore automobiles, more television sets, a greater volume of all otherconsumer goods - and more lethal weaponry. Negative social effects -pollution, destruction of the landscape, the unprotected health of thecitizenry, the threat of military action and death - do not count assuch.The corporate appropriation of public initiative and authority isunpleasantly visible in its effect on the environment, and dangerousas regards military and foreign policy. Wars are a major threat tocivilised existence, and a corporate commitment to weapons procurementand use nurtures this threat. It accords legitimacy, and even heroicvirtue, to devastation and death.Power in the modern great corporation belongs to the management. Theboard of directors is an amiable entity, meeting with self-approvalbut fully subordinate to the real power of the managers. Therelationship resembles that of an honorary degree recipient to amember of a university faculty.The myths of investor authority, the ritual meetings of directors andthe annual stockholder meeting persist, but no mentally viableobserver of the modern corporation can escape the reality. Corporatepower lies with management - a bureaucracy in control of its task andits compensation. Rewards can verge on larceny. On frequent recentoccasions, it has been referred to as the corporate scandal.As the corporate interest moves to power in what was the publicsector, it serves the corporate interest. It is most clearly evidentin the largest such movement, that of nominally private firms into thedefence establishment. From this comes a primary influence on themilitary budget, on foreign policy, military commitment and,ultimately, military action. War. Although this is a normal andexpected use of money and its power, the full effect is disguised byalmost all conventional expression.Given its authority in the modern corporation it was natural thatmanagement would extend its role to politics and to government. Oncethere was the public reach of capitalism; now it is that of corporatemanagement. In the US, corporate managers are in close alliance withthe president, the vice-president and the secretary of defence. Majorcorporate figures are also in senior positions elsewhere in thefederal government; one came from the bankrupt and thieving Enron topreside over the army.Defence and weapons development are motivating forces in foreignpolicy. For some years, there has also been recognised corporatecontrol of the Treasury. And of environmental policy.We cherish the progress in civilisation since biblical times and longbefore. But there is a needed and, indeed, accepted qualification. TheUS and Britain are in the bitter aftermath of a war in Iraq. We areaccepting programmed death for the young and random slaughter for menand women of all ages. So it was in the first and second world wars,and is still so in Iraq. Civilised life, as it is called, is a greatwhite tower celebrating human achievements, but at the top there ispermanently a large black cloud. Human progress dominated byunimaginable cruelty and death.Civilisation has made great strides over the centuries in science,healthcare, the arts and most, if not all, economic well-being. But ithas also given a privileged position to the development of weapons andthe threat and reality of war. Mass slaughter has become the ultimatecivilised achievement.The facts of war are inescapable - death and random cruelty,suspension of civilised values, a disordered aftermath. Thus the humancondition and prospect as now supremely evident. The economic andsocial problems here described can, with thought and action, beaddressed. So they have already been. War remains the decisive humanfailure.· This is an edited extract from The Economics of Innocent Fraud:Truth for Our Time, by JK Galbraith, published by Allen Lane.http://www.guardian.co.uk/print/0,3858,4971252-103677,00.html