Michael Woodiwiss has produced a book that should be required reading for all those who like to harangue leaders of the western world about the evils of globalisation. It will give them the most satisfying sensation of having all their prejudices confirmed.
Gangster Capitalism takes the view that most capitalism amounts to gangsterism and that the bigger the company, the worse its behaviour is likely to be. It is not difficult for the author to find examples to back up his thesis that the corporate world is riddled with crookery.
Had he wanted, he could have found many more examples of companies playing by the rules, creating jobs, satisfying customers and even indulging in some charitable giving. He chose not to do so, meaning that the failings of a minority are used to justify a damning indictment of big business.
With a typical sweeping judgment, Woodiwiss contends that in the wake of Enron's spectacular collapse, 'American corporate culture in general was shown to be thoroughly corrupt'. At least he leaves us in no doubt as to where he is coming from. His two previous books have been devoted to crime and corruption in the US, and this third tome doesn't stray far from that territory.
No-one could claim that global businesses have been without blemish.
As Enron and WorldCom imploded in the US, naive investors, both amateur and professional, realised that they had bet their cash on little more than lies. Bernie Ebbers, WorldCom's founder, may still have his stetson, but his swagger is likely to be less in evidence now that he is incarcerated in a US penitentiary with a 25-year sentence ahead of him.
Defrauding investors, largely American ones, of $11 billion was viewed as an extraordinary felony and not something that the US courts would take lightly. Yet readers of this book might conclude that Ebbers had done nothing out of the ordinary. This shocking statement in the introduction sets the tone: 'The United States tells other nations and international organizations, notably the United Nations, how to control organized crime at the same time as so much of its business activity can be defined as simple racketeering.'
Honest business people across the Atlantic might rightly take exception to such an allegation. The US took a tough line on white-collar and corporate crime long before many other countries. Being guilty of price-fixing could result in a jail sentence in the US when it was not even regarded as a crime in Britain. Only with the Competition Act 2003 was there legislation to outlaw most cartels.
Global companies created in the US have not always behaved impeccably.
On matters of pay and perks, in particular, some have been seen to err on the greedy side. Even Jack Welch, previously regarded as a hero for the tough way he led the mighty General Electric, was a little tarnished by revelations of the scale of his retirement package. Use of a GE jet, a Manhattan apartment, two offices, a chauffeur-driven limousine, front-row seats for basketball and baseball games, bodyguards and a personal assistant were intended to ease his retirement. No wonder he needed the tax advisers, also thoughtfully provided by GE.
But in a materialistic society, success will command material rewards.
On the whole, the largesse of US companies has been performance-related, which means that shareholders should benefit from a company's performance, as well as those running it.
If there is any part of the business world on which Woodiwiss might have been excused for concentrating his attack it is, perhaps, Wall Street.
The crusading Eliot Spitzer set about the financial markets from his position as New York State attorney general, intent on exposing Wall Street's excesses.
Investment banks emerged from his investigations as organisations high on greed and low on ethics. Clients were, for example, routinely duped by analysts who talked up stock to persuade them to buy while privately admitting that the paper was of little value.
When he moved on to the insurance industry, Spitzer found fraud and bid rigging, which led to the world's largest insurance broker, Marsh & McLennan, being heavily fined. There are, though, immoral people to be found in most walks of life, from medicine to monasteries. Business undoubtedly has its share.
Woodiwiss ranges through a predictable list of horror stories, from the Exxon Valdez oil spill to the Bhopal chemical plant disaster in India.
They are all examples of what he thinks of as gangster capitalism. The remedy he prescribes for this evil involves 'more people around the world and in the US itself challenging the post-cold war orthodoxy that US-style neo-liberal democracy and market capitalism is the only way forward'.
It is not gangster capitalism alone that this book opposes, but capitalism itself.
Gangster Capitalism Michael Woodiwiss Constable & Robinson £12.99 MT price £10.99
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