Seeing Through Corporatist “Truth”

By William Rodriguez / Fall 2020

My girlfriend and I were looking for a parking spot with “No for Prop 22” banners taped to our car windows. The light turns red and a man driving for Lyft pulls up next to us. He shouts through his open window and asks; “Why no on 22?”, I look at my girlfriend then the man in surprise. My girlfriend, after her surprise, says “ You can have flexibility and benefits.” the driver with curiosity says “Hmm… Really?!” The light changes to green, we continue to find parking for the labor union protest against proposition 22. The Lyft driver continues his route. I was mostly surprised because of the civility regarding the short but enlightening experience of how we think of our labor. Why was he unsure? I was curious about his answer. As we will learn, app based contract workers have been and will continue to suffer low wages and benefits as long companies are allowed to use the government to benefit themselves. The problem is that we, as a Neoliberal society, see our work as a contractual rather than negotiable agreement. So why did the driver and I enter a state of contemplation to look at the problem deeper? First, we have to understand how our neoliberal society frames the issue of Proposition 22. Prop 22 is a bill that changes app based workers from full employment status to contract based work. This reclassification makes app drivers temporary workers and provides no employment benefits. Advertisements in support of Proposition 22, especially in the Bay Area, were everywhere: billboards, radio, ads, and facebook. It could not be escaped. Prop 22 was on signs and minds everywhere. Proposition 22, which recently passed by 58 percent, was marketed as a decisive vote against the government interference in the economy. According to proponents, legislators wanted to take away hundreds of thousands of jobs, worker flexibility, and increase prices for consumers. We the people of California were told that the government was to blame, not the companies. The companies just want to provide the best service at a low price. So how does one solve this problem of government invasion into our lives, by taking away jobs and making our services more expensive? Vote for Proposition 22 and let the companies set the prices and pay workers what they think is deserved. Through lobbying we are told that this solution is what we the consumer and the worker want. So great, we the consumer and workers both win! There is no problem. To get back to the question, why were the driver and I so surprised and confused? It seems we broke the corporatist common sense. He doesn't know what he wants and I realized that we as people don't always know what is best for us. Proposition 22 is not the first instance of corporatism. There is a long history of powerful private business interests shaping workers lives. We can see similar rhymes in history when the common sense “truth” breaks and disaster erupts causing us to ask what the truth is.

In the United States we can look back into the Gilded Age to find similar patterns of corporatist “truth” establishing itself as the ruler of society. The Gilded Age was a period between 1860 and the early 19th century producing the greatest economic growth in the United States -- but only for an elite few. Everyone from across the globe wanted to live in the United States in the hope of achieving the American dream. Howard Zinn in his book, A People's History of the United States, examines this period and highlights the great wealth created in the period: banks, politicians and families like J.P Morgan, Chase, Andrew Carnegie, John D. Rockefeller and members of the Cleveland administration. These individuals and corporations worked in tandem to create large monopolies like the U.S Steel Corporation, which dominated all sectors of the steel industry. In 1884, The United States federal administration of Grover Cleveland also facilitated the growth of the navy and government by only purchasing steel from the U.S Steel Corporation. All of this was facilitated by the government and corporations to acquire great swaths of wealth and industrial growth. So the American economy was growing exponentially with the western railroads expanding. The economy was also growing via the U.S Steel Corp., a strong naval force and other sectors like oil. The large accumulation of wealth and political power under these corporations is called corporatism. Corporatism is a form of governing which privledges policy in favor of rich interests groups like companies, or individuals. However, underneath this veil of great economic growth and corporatism were great problems.

Looking deeper we see how far corporatism pushes for profits above all else, creating great exploitation and disaster. First, over 200,000 men worked 12 hours a day for low wages doing grueling and intense labor work on railways. Looking even deeper according to Zinn’s research in the year of 1889 over 22,000 railroad workers alone were killed or injured. Large numbers of civil war veterans, landless people, immigrants of China and Ireland were all at the mercy of these corporations since the end of the civil war. Soon, long working hours, dangerous working conditions and high death counts were negatively affecting both consumers and workers. So advocates demanded government oversight and regulation of railroad companies. Consequently, the Interstate Commerce Act of 1887 passed creating government officials whose jobs were to investigate malpractice. However it became only a formal gesture to satisfy citizens and keep profits moving. President Cleveland's soon to be Attorney General, Richard Olney, told concerned railway owners that the act satisfied citizens’ complaints while guaranteeing the government oversight will be nominal. Many laws like this would continue promising citizens and everyday people protections and benefits, but turned out in some way to benefit corporations and keep the status quo. We can see this in the Fourteenth Amendment which treated corporations as persons with rights, as well as the Sherman Act, which was supposed to prevent monopolies but was ineffective at dismantling them. This is a small portion of the problems which corporatism creates. The status quo of corporatism is anti-democratic and puts profits over people.

At the bottom of this despair and corporatism we finally see the status quo prioritizes profits, the free market and ignores the changes people advocate for. Unions and social movements were abundant in the Gilded Age like the Great Upheaval of 1877 which saw over 100,000 railroad workers strike. These movements were constantly crushed by violent police forces and private guards. The call for worker reforms arguably became a serious political issue with the Triangle Shirtwaist Factory Fire of 1910. The factory fire killed 146 men and the majority were women with 123 dead. It was the worst accident to occur in New York at the time. Private guards along with the police destroyed previous efforts which demanded a union, better pay and to improve conditions of the building. Due to fault emergency exits caused by the shirtwaist factory owners, many people died. The government also facilitated the business by taking bribes, arresting workers, and charging them without charging the private guard who committed violence. (Min. 34) In this tragic event, we see the profits of the Triangle Shirtwaist companies prioritized over the workers demands. We also see how the government helped these companies to keep the status quo.

In the period of the Gilded Age, we learned economic and political prosperity was for the political and business elite. Around the framework known as corporatism, a common sense worldview was developed in order to keep the rich on top and it was enforced through state coercion and law. This common sense also communicated that the state should not interfere with business. If the state does interfere, it should only help corporations keep power and grow. As we continue to learn, corporatism is still strong today in our contemporary society just with a new face.

In the early 1970s the governments of liberal democracies and other governments faced a global oil crisis, massive inflation and debt with no solutions in place. In this despair and reaction to powerful social upheaval, rich and powerful corporations and bureaucrats offered a solution which advocated for American business to save citizens and put business at the forefront of political priority. Do corporations claiming to know what is best for citizens and government seem familiar? It will become more clear. In 1971 The Lewis Powell Memo would become the blueprint for return to corporatism and the era we live in today. In the document Lewis Powell writes “It is time for American business — which has demonstrated the greatest capacity in all history to produce and to influence consumer decisions — to apply their great talents vigorously to the preservation of the system itself.” Along with American business applying its own force it will do this with the government's help. How would the government help? Powell thinks the political area should vigorously advocate and support the enterprise system. Unfortunately, the terrible economic conditions, along with advocates for American business seized the opportunity to strip many of the regulations which were hard fought by workers and returned America to the status quo of corporatism.

In this new era, which we will call Neoliberalism, free markets, competitive individualism,  and negative liberties are all cornerstones of what we are told is correct. I just mentioned all of these terms? What do they mean and how do they contribute to our understanding? This will become more clear as we uncover the history of this era. After Powells memo, and other advocacy efforts, it didn't take long for a politician named Ronald Raegan to become president. Neoliberalism much like corporatism believes corporations and rich interest groups should be supported by the government. Neoliberalism also believes American government should not help citizens through public resources, strong safety nets or regulate corporations.  In this new common sense thinking, Ronald Reagan advocates for working people to earn money for their families without the need of government help. Workers free from government interference is called negative liberty. Negative liberty is good because without the government economic growth thrives for entrepreneurs, businesses and working people. This is what we are told. As a result of this narrative to get rid of debt and inflation, government officials like the Reagen administration began cutting: social welfare benefits, public resources and discarded government regulations for corporations. With government interference out of the way corporations could operate freely on the market to innovate and grow the economy out of a recession. Hence the term free market. You the reader may ask, what happened between the triangle fire and the economic crisis of the 70s? You may also be asking, what were the government benefits and protections that were reversed in the neoliberal era? Together we will now examine the ways in which corporatism was fought through labor organization and government regulation.

Revisiting corporatism in the Gilded Age we see vast labor movements rise against the injustices that occurred like at the Triangle Factory Fire, This era becomes known as the progressive era. For example, after the hopelessness felt by family members and friends, the public demanded government oversight and investigation into the large fire. This consisted of worker testimonies of conditions and factory inspections. Consequently this event was a catalyst for many policies which improved worker conditions like the Sullivan Hoey Fire Prevention Law. The law enforced minimum safety requirements for buildings like fireproofing guidelines, sprinkler systems and a fire prevention unit for New York. The fire also led to the improvements of enforced minimum wages and better working hours. Other examples of this progressive era include the 20,000 person bread and roses strike of 1912 in Lawrence Massachusetts. This period spread even during the Great Depression. In this era, nearly a third of Americans could not find work. Much of new New York was unemployed and as one unemployed worker stated, “We wanted unemployment insurance; we wanted home relief, hot meals for children in schools, and housing for the destitute people living in the city dumps.” eventually through years of protest and boycotting rent control was successful and people were evicted at lower rates. This period was the beginning of corporations' reduction in power.

The second Bill of Rights, while never ratified is important to consider because of its opposition to corporatism. In 1944 ex-president Franklin Delano Roosevelt saw the need for economic rights and freedoms which people would be guaranteed regardless of what corporations or rich interest groups wanted. These included the right to; a useful job in government industry, every farmer to make a decent living, protect industry from monopolies and unfair competition, protections from unemployment, accidents. While the doctrine never passed it was a clear indication of the government being pro-worker and against corporate interests. This post World War II era saw great economic growth per capita for many families as well as an expansion of worker rights through economic recovery, reform of capitalism and creation of social welfare programs like social security and unemployment insurance. It's important to remember not long ago our government and society was for supporting people over profits. We need to remember our liberation from the status quo is in history and great victories have been won for workers.

The great movements against corporatism continued into the 60s and 70s with Cesar Chavez and the Delano Grape Strike. The strike lasted two years and eventually in 1970 workers earned the grape pickers better pay, benefits, and protections. They also established a union called the United Farm Workers of America. This strike was partially successful because an international boycott was established against purchasing grapes in California. In 1972 in an effort to gain power and prevent workers from asking for better benefits corporate farmers funded and drafted a measure named proposition 22. Does this sound familiar? The ballot attempted to keep workers from organizing unions and prevent similar strikes. Proposition 22 fails and the progressive and golden eras of 1910 to 1970 fade with the surge of neoliberalism.

So we have returned to the common sense of neoliberalism. The Powell memo is victorious and corporations are supported by the government. Workers suffer without any support for when personal or global crises occur. The most immediate situation which highlights this inequality is Covid-19. At the height of Covid-19 over 40 million people were unemployed and unable to pay their bills. In the heat of this crisis Trump's administration passed the CARES act. You or someone you may know benefited from this one time 1,200 dollar relief check. The check or the additional 600 dollars to unemployment benefits might have helped you pay for rent or food. This might have felt like a benefit and sign of the government supporting its citizens but on closer inspection we see the corporations were the real beneficiaries of the package. Over 1 trillion dollars were spent bailing corporations out with small business loans often landing in the hands of large companies.

As we can see at a macro level, neoliberalism is alive and well. At the micro level with Proposition 22 we can see a more clear picture regarding the conversation I had with the Lyft driver. The Lyft driver and I broke through the common sense narrative of neoliberalism telling us we need more freedom from the government and corporations telling us what's best. The reality underneath this common sense narrative is now an all to familiar pattern for us. Similar to the 1972 proposition 22, the new proposition 22 is funded by rich and strong tech companies like Uber, Lyft and doordash. Together these companies lobbied the most expensive campaign in California history at 180 million dollars. This also should remind us of the Gilded Age when policy was created to protect companies and give them benefits. How specifically do tech companies benefit from proposition 22? The proposition would reduce these drivers to strictly contractor status meaning no; paid sick leave, minimum wage, unemployment benefits, workers compensation and taxation contributing to workers social security and medicare. The technology companies of Uber, Lyft and Doordash need Proposition 22 to pass because their businesses have yet to turn a profit and cutting down worker benefits and conditions is an easy expense to reduce costs.

Despite the 180 million dollars spent blasting us with ads about why proposition 22 is good and how it will benefit everyone it is increasingly clear this truth and status quo is slowly becoming less and less true. During Covid-19 we see how terribly workers and citizens of the United States have fallen and how the system of neoliberalism which offered us a way out has failed. Proposition 22 passed, we have surpassed 300,000 deaths at the time of this paper and no future economic relief is coming for jobless people or workers trying to survive. Proposition 22 matters because in this deep depression companies have relentlessly acquired more and more wealth and contract work signals the familiar privileging of profits over people. While everyday people: fear getting Covid-19, mourn the deaths of their loved ones, struggle to pay debts and often risk themselves everyday corporatism ammases more and more power. There is no reason for us to believe this will stop. Why would proposition 22 and contract work only be for app based drivers? Amazon, Walmart and other large companies already use this model, the real danger comes when laws pass to protect these corporations. Especially in a pandemic as many workers have lost their jobs or cannot work anymore due to health concerns, with Proposition 22 workers will continue to not be able to collect unemployment benefits. While you and I stir in despair we need to remember these are the moments which are a catalyst for change.

While writing this the first vaccines are coming out which is a promising sign of Covid-19 becoming less of a detriment to our lives but we must accept we cannot return to normalcy. You and I are now equipped with historical knowledge. When atrocities like the Triangle Factory Fire and awful working conditions are untolerable the real work begins. Fortunately the driver and you surely feel everyday a sense of unease, anger and sadness in the trajectory of your life and the world. Please know the feelings are collective. As a collective the people are realizing the status quo of Neoliberalism is failing and soon these emotions turn to uproar. Already we see signs of a politics which is trying to help the people have a livable income and better quality of life. These movements include; an economic bill of rights, national minimum wages rising, and progressive democrats for people over profits. We don't need to reinvent the wheel. We need to build on the long tradition of workers solidarity and act against the neoliberal status quo.