The American Corporate State

History is the plaything of history. No, not a Gertrude Stein wannabe, rather a commonsense point that each generation of historians treats the past, if not from a presentist standpoint, then at least reading into it inescapable premises and biases (we call that, “interpretation”) that cannot but help to color the account. Some of these biases become “official” or semi-permanent because they contribute to the national mythology, in the case of America, of democracy and service on behalf of the public welfare. At times, the fulcrum is the nation, but not infrequently, the real fulcrum on which historical interpretation rests is capitalism itself, nation and capitalism becoming interchangeable when the mythology works and runs in high gear.

Such is the context for the structural framework best characterizing modern (post-Civil War to the present, and very likely, much beyond) US economic history, i.e., to all intents and purposes, the systemic integration of the two parallel structures of power, so that government, in the name of the Regulatory State, actually runs interference for business (include here, importantly, banking) through encouraging and facilitating trends toward monopolization, elimination of internecine competition, by letting the largest firms draw up the ground-rules (enforced by government), even sector-by-sector, under which they operate, and a foreign policy–beyond the militarization of capitalism as such, via vast “defense” appropriations and securing the nation on a permanent-war footing–geared to market-and-investment penetration, maintenance of favorable international monetary and banking standards, and, not least, the assured supply of necessary natural resources and raw materials, often conveniently left in situ as part of outsourcing. Ownership trumps location in the manufacturing process.begging slogans5

In the modern era, again, particularly, the US, capital becomes indistinguishable from government power, except that in fact the latter’s purpose is to serve the former and therefore willingly accepts a subordinate position in the relationship. Nothing about, or in, the political process upsets or denies this proposition: the State is, first and foremost, a Capitalist State, where one ends and the other begins the subject of exquisite sophistry and make-believe conflict. With this as short prologue, I would like to go into the status of government regulation in America today, using a comparatively minor example now in the news–the National Highway Traffic Safety Administration (NHTSA)–thanks to the New York Times, Hilary Stout, Danielle Ivory, and Rebecca Ruiz’s article, “Regulator Slow to Respond to Deadly Vehicle Defects,” (Sept. 15), the agency a microcosm of America’s regulatory intent of non-regulation, with the more famous examples, beginning with the Interstate Commerce Commission (1887) and the Federal Reserve System (1913) still more extensively, though perhaps disguised, doing the work of the business system: like the local constable, protect and serve, with the added features, consolidation, solidification, and, as practices grow more outrageous and onerous, conferral of the government’s seal of approval to give assurance and ward off criticism.

Gabriel Kolko, in two early, conceptually brilliant, books, Triumph of Conservatism and Railroads and Regulation, done before his writings on US foreign policy, laid out the framework of interpenetration, with Theodore Roosevelt and Woodrow Wilson as seminal figures in furthering the rationalization of industry and banking, respectively, the earlier ICC already an indication of the systemic harmonization of government and business at the heart of American capitalist development. Forget laissez-faire, forget TR the trustbuster, forget Wilson the liberal idealist (save as revealing the true colors of American liberalism, even this early), and forget FDR and the New Deal, despite my deep attachment to it on so much else, for the National Recovery Administration, which, through government code authorities, significantly advanced monopolization. Those of you who saw the first installment of the PBS’s series, The Roosevelts, should know at the outset the whitewash of TR’s murderous, yes, murderous, instincts (not shown, except qua taxidermy, itself his entrance into eugenics and applause for what was coming out of neighboring Cold Springs Harbor; for TR, in the Dakota Badlands, was not just pure exuberance and athleticism—he said that his Rough Riders would love the chance to take a shot at the Haymarket rioters, and “my men shoot straight.” Let’s see what they do with the Great White Fleet, imperialism, and the glorification of war.

In other words, history circa 2014 passes over interpenetration as the thematic core of US capitalist development, a normalization of the Age of Deregulation the principal element left out so as objectively to obfuscate the relation of mutual dependence and what this portends for society as a whole: widening class differentiation, a more submissive working class, admiration for the Titans of industry and banking, and, in the background, war, intervention, massive surveillance, and easy access to the White House for the powers that be. The inner core of a business civilization blossoms forth as what I believe, based on the German example of interpenetration to the same end of business growth (with the State ultimately leaping beyond to assert its own independent identity—after having done the work for capitalism by means of organizing the Nazi economic fronts), is fascism, not presumably Huey Long- or Joe McCarthy-style, but corporate America reaching its full potential-style. Again, Kolko repays careful study, a radical when to be clear-headed was still possible, more so than today. One must also recognize the dedicated and courageous work of Ralph Nader to automotive safety; my own analysis, as seen above, may parallel his own, but from a somewhat different, essentially systemic, vantage point.


The article begins, unintentionally, on a droll note, as though wisecracking in an Improv club with resort to macabre humor: “General Motors published an article in February [2014] on its Chevrolet website trumpeting an achievement certain to sell a lot of cars. In 2014 Chevys had earned more five-star overall safety ratings in a new car assessment program than had any other brand. The NEXT DAY [my caps.], G.M. began recalling millions of its cars for a deadly ignition defect, and by August, six of the eight five-star Chevrolet models had been recalled for a variety of safety issues, including defects in air bags, brakes and steering. Five had been recalled multiple times.” The song Frankie used to sing in my youth, “What a difference a day makes, 24 little hours…,” except that not falling in love but falling into an early grave would better complete the thought. GM is acting as expected (i.e., for profit), but how explain NHTSA, which awarded the “stellar rankings” and “is mandated by Congress to ensure the safety of automobiles”? As the reporters write, the agency “has a record of missteps [criminal negligence seems more to the point] that goes well beyond its failure to detect an ignition switch defect in several models of G.M. cars now linked to at least 13 deaths.

The box score of carnage, matched by the agency’s indifference to the industry’s state of play, as in the cavalier disregard of complaints, reciprocated in turn by companies’ high-powered legal staffs to knock these complaints down (along with effectively pressuring NHTSA to sit on the results of investigation, if ever undertaken) usually before they get to trial, makes for a cozy modus operandi (defining regulation) and a structural modus vivendi (defining the way of life of advanced capitalism, especially in America) so ingrained in the business mindset, then shared by the general public, as to render the Corporate State near-axiomatic. The Times here does yeomanly service (I bow to none in my criticism of Times’ editorial board, most of its op-ed contributors, and several of its more highly-placed Washington reporters, but it is a serious mistake not to recognize the writings of certain of its investigative reporters, as now, who, as also in the field of national security, uncover the darker, more contemptible side of USG operations) in the article: “[Its investigation] into the agency’s handling of major safety defects over the past decade found that it frequently has been slow to identify problems, tentative to act and reluctant to employ its full legal powers against companies.” Box score thus far: no runs, no hits, multiple and grave errors (at the cost of human life, as company profit sheets until very recently were largely unaffected).

The reporters worked prodigiously, researching in a wide range of document collections and conducting numerous interviews (and why not?, given the hidden nature of both companies’ and agency’s holdings and rude response to requests for information), and they found that “in many of the major vehicle safety issues of recent years—including unintended acceleration in Toyotas, fires in Jeep fuel tanks and air bag ruptures in Hondas as well as the G.M. ignition defect—the agency did not take a leading role until well after the problems had reached a crisis level, safety advocates had sounded alarms and motorists were injured or died.” To its credit, NHTSA was not nationalist-chauvenist, protecting foreign companies with equal fervor as American: capitalism blesses all. Too much, sordidness compounded: the funds for investigating safety defects, 1% of total budget, while “the rating of new cars,” they point out, is “a favorite marketing tool for automakers,” and meanwhile the agency “has been so deferential to automakers that it made a key question it poses after fatal accidents optional—a policy it is only now changing after inquiries from The Times.” Sorry, gnashing of teeth. The driver, e.g., of a 2005 Camry was injured, her passenger killed, in 2007, when the car “suddenly accelerated through an intersection and hit an embankment.” In 2010 NHTSA “inquired about the cause of the accident” (it took its own sweet time), Toyota replying: “’Toyota understands that this request is optional and respectfully declines to respond at this time.’” Only three years later did the families win a suit for compensatory damages.

America corporate rapine (here plundering the consumer’s pocketbook and trust, and the nation’s faith in the integrity of its government) and murder continues, always the same, suppression of knowledge of the defects—the agency fully cooperative in turning the other cheek, assuming it cares at all. Take the Chrysler Jeep: “After Chrysler balked last year at the regulator’s suggested 2.7 million vehicle recall for exploding gas tanks in its Jeeps, the federal agency scaled back its request by 1.1 million cars. It also agreed to Chrysler’s demand that the automaker not be required to say the vehicles had a safety defect or that the automaker was at fault.” Small potatoes? They go on: “The agency has linked 51 deaths and at least two serious injuries to the defect over 14 years.” Yet, silence is golden. Ditto, Honda, now though, it’s rupturing air bags, to which “the agency cut short an investigation,” declaring there was “’insufficient information’” to warrant taking action. That was 2010; four years later, Honda and ten other companies using the defective air bag recalled more than 13 million cars. I like the government response, not unlike the Obama administration on drone warfare—death a meeting ground for business and government, shielded in opaqueness: “The agency declined to make regulators available for interviews, agreeing only to reply to written questions.” Better still, its response to queries: “’N.H.T.S.A. has a proven record of aggressively investigating and pursuing recalls.” It goes on, self-righteousness hath no shame: “N.H.T.S.A. evaluates each potential safety defect issue based on the particular circumstances involved and does not have a set threshold for opening defect investigations beyond our core mission of reducing fatalities and injuries from motor vehicle crashes.” Translated into English: No investigations unless pressured to do so. No criteria of wrongdoing. Box score: tossed out of the majors, relegated to semipro ranks, on the automakers’ own teams via the revolving door.

The picture is clear, the rotten core of the regulatory apparatus in America, whichever way one turns, automotive safety hardly being the exception to an otherwise stringent pattern to safeguard the public welfare. I linger on, fascinated by the horror: “In the late 1990s, it [the agency} was sharply criticized by lawmakers and consumer advocates for failing to detect a pattern of highway rollovers in Ford Explorers with Firestone tires that was eventually tied to 271 fatalities.” Despite efforts (which I frankly suspect) by Congress in 2000 “to give the agency more leverage over the auto industry and better access to its accident data,” the old adage apparently holds, that you can lead a horse to water…. And the reporters themselves conclude, “Yet since then [the 2000 legislation], the agency has continued to show sluggishness in its investigations, feeding a perception that it does not stand up to the politically influential, multibillion-dollar automobile industry until it is forced to do so by outside pressure.”

Even then, don’t bet your life-savings. The record of GM in particular sticks in the craw: “The Times reviewed more than 12,000 consumer complaints to the federal agency about power, speed and ignition problems in the G.M. models recalled for ignition-related problems.” The delay and the brush-off followed: “The first stalling complaints arrived in 1997, and starting in May 2000, the agency consistently told drivers that there was insufficient evidence to open an investigation, even when drivers presented similar complaints that they had found on the Internet and on the agency’s own website.” Then, a list of horror stories, capped by the reporters’ comment: “As of this month [Sept. 2014], G.M. has recalled nearly 16.5 million vehicles for ignition-related problems, including 2.6 million for the defective switch that the automaker acknowledges IT KNEW ABOUT FOR YEARS. [my caps.] In almost all of the ignition recalls, the problem could result in moving cars suddenly shutting off, disabling air bags and other key systems like power steering and power brakes.” When one driver’s car, a 2010 Chevy Impala, shut down its power near Tuscaloosa, she wrote to GM. “A division chief wrote back that, based on a review of its database, there was ‘insufficient evidence to warrant opening a safety defect investigation.’”

Another driver, summer of 2005, pitch black conditions, on an interstate in rural West Virginia, this time the “car shut off and she had to wrestle the wheel to bring it to the side of the road. Trucks whizzed by in the dark, and her 2004 Pontiac Grand Prix shook as they did. In the back seat of the car, her youngest daughter began to cry. ’You can see how a child would be frightened…. I was afraid, too.’” She wrote to the agency, regulators replying a month later in almost identical language to that used by GM in the other case: “a review of their database ‘revealed insufficient evidence to warrant opening a safety defect investigation.’” (The reporters missed the seeming coincidence.) I say this only partially tongue-in-cheek: Which poses the greater threat to America, ISIS or General Motors, is a query deserving of a national conversation. Finally, to David Friedman, present NHTSA administrator, who claims not to have known that the agency had subpoena-issuing powers. The blind are leading the seeing in a mad rush to the bank, or rather, both are keen-sighted, regulators embracing regulated in a Grand Feast at the expense of the people.

My New York Times Comment on the article, same date, follows:

“Safety sells.” So does prostitution, in this case a federal government agency charged with ensuring the SAFETY of the American public, has embraced perpetrators of wrongdoing–a sweetheart relationship–in violation of its sacred mission. Clean out the Augean stables–a director who claims ignorance of subpoena powers, an agency devoting 1% of its budget to safety defects, a staff more adept at stonewalling the public than performing investigative duties. NHTSA probably has a rubber stamp, marked “insufficient information,” on every desktop.

Surprising? No. Beginning with TR (notwithstanding the PBS program on the Roosevelts), the structural paradigm has been, the interpenetration of business and government as the essence of the regulatory framework. Regulation, not to regulate, but rather, as here, with the rating system, to confer the government seal of approval on corporate production. Not just NHTSA, but going back to basics, the Federal Reserve System (govt. appendage of the banking industry), SEC, FDA, a harlotry of public service.

Will this excellent article of The Times produce results, changes, AUTHENTIC regulation? Highly doubtful. This is the way American business/banking operates, in collusion with a government anxious to do its bidding. And yes, the revolving door–a soft-cushion remunerative landing after departing the respective agencies. Institutional gangsterism under the waving American flag.

Norman Pollack has written on Populism. His interests are social theory and the structural analysis of capitalism and fascism. He can be reached at

Norman Pollack Ph.D. Harvard, Guggenheim Fellow, early writings on American Populism as a radical movement, prof., activist.. His interests are social theory and the structural analysis of capitalism and fascism. He can be reached at