Large corporate capitalism is a breed apart from smaller scale capitalism. The former can often avoid marketplace verdicts through corporate welfare, strip owner-shareholders of power over the top company bosses and offload the cost of their pollution, tax escapes and other “externalities” onto the backs of innocent people.
Always evolving to evade the theoretically touted disciplines of market competition, efficiency and productivity, corporate capitalism has been an innovative machine for oppression.
Take productive use of capital and its corollary that government wastes money. Apple Inc. is spending $130 billion of its retained profits on a capital return program, $90 billion of which it will use to repurchase its own stock through 2015. Apple executives do this to avoid paying dividends to shareholders and instead strive to prop up the stock price and the value of the bosses’ lucrative stock options. The problem is that the surveys about the impact of stock buybacks show they often do nothing or very little to increase shareholder value over the long run. But they do take money away from research and development. And consumer prices rarely, if ever, drop because of stock buybacks.
Apple’s recent iPhone is produced by 300,000 low-paid Chinese workers employed by the Foxconn Technology Group. They are lucky to be paid $2 per hour for their long work weeks. It would take $5.2 billion a year to pay these Chinese iPhone workers about $10 per hour.
If the $130 billion from Apple’s capital return program was put into a foundation, it could pay out, at 4% interest, $5.2 billion year after year. Compare $130 billion of “dead money” to the $1 billion in “live money” Tesla Motors has spent on research and development to produce its revolutionary electric cars.