Corporate Dreams: Big Business in American Democracy from the Great Depression to the Great Recession

Chapter 28 - Can the Corporate American Dream Be Saved?

198 Chapter 28 Can the Corporate American Dream Be Saved? As part ii has shown, the business corporation’s failure during the Great Depression to deliver a decent life to a large number of Americans brought the government response that created the corporate American Dream of half a century ago. The Great Recession that began with the financial crisis of 2007–2008 has raised again the issue of how a democratic society can make a corporate economy work for all of its citizens. The kind of actions that created the corporate American Dream—for example, laying the foundation for a strong labor movement with the Wagner Act—would not work now in a global economy. It will require creative new policies and attitudes to restore the American Dream. The hollowing out of the American middle class and the development of a two-tier society was well under way before the Great Recession began. Measures that return the economy to its state before the Great Recession will not alone be enough to restore the American Dream. Only a change in worldview will make possible the new policies needed to save the dream. The popular ideological model that pits freedom and prosperity against government must also place the business corporation in the mix. From the East India Company down to the present, corporations have shown themselves capable of massive incompetence and worse. Yet the business corporation is also capable of great social achievements when balanced by democratic government, by nongovernmental organizations, and above all by citizens and consumers. Just as Ronald Reagan raised the prestige of the business corporation by his antigovernment ideology, Americans now need a moderate anticorporatism that recognizes that democratic action is needed to restore prosperity. Such moderate anticorporatism will show that the actions we need are less radical than some would have us believe. Consider health care reform, an issue second only to the general state of the economy in the 2008 electoral campaign of President Barack Obama. Health care reform meant many things to many people— universal coverage, cost reduction, and no exclusion for preexisting conditions. In this mélange of good causes, the fact that the failure of the health care system was a corporate failure fell out of focus. Obama should have called instead for corporate health insurance reform. American medicine is a largely corporate affair, and its history represents the best and the worst of the business corporation. In the late nineteenth century, when business corporations had only just begun their dominance of the American economy, physicians were for the most part poorly trained; techniques such as anesthesia and antisepsis were in their infancy; patients who survived the shock of major surgery might succumb to infection; and the benefits of American medicine, such as they were, were relatively affordable and broadly available. Since then, American medical care has risen dramatically in quality and even more dramatically in cost. Those high medical costs can be attributed in significant measure to the fact that in the United States health insurance became a product to be sold by corporations rather than a service to be provided by society. The health insurance companies sell, in effect, life itself—a market where Say’s Law is surely right, a market where demand will always keep pace with supply. In 2008, 16 percent of U.S. gross domestic product went to health care. That was half again as much as in any other developed nation, including those with singlepayer health insurance or what opponents called “socialized medicine.” It seemed likely that by 2020 Americans would be spending one out of every five dollars they earned on health care.1 Even though Americans spent far more for it, they got worse care than citizens of many other nations. A 2007 study by the widely respected Commonwealth Fund comparing the American health care system to those of Australia, Canada, Germany, England, and New Zealand placed the United States “last on dimensions of access, patient safety, efficiency, and equity.”2 On traditional measures of national health such as life expectancy and infant mortality, the United States lags several dozen countries.3 Why did Americans pay so much for such poor health care? Their insurance premiums went to corporate bureaucracies whose job was to Can the Dream Be Saved? 199 make sure that their companies did not sell insurance to bad risks, that is, to those who most needed insurance. By leaving...