Governments Change, the Corporatocracy Endures
Ultimately, the dominance of global capital (the Corporatocracy) is not financial– it’s political.
One little-remarked consequence of the central banks’ policies of near-zero interest rates and quantitative easing is the unrivaled dominance of mobile global capital, i.e. the Corporatocracy. The source of corporate political power is the ability to borrow essentially unlimited sums for next to nothing: what I have long termed free money for financiers.
Armed with central-bank supplied unlimited credit, global capital can outbid local residents and businesses. Over time, profitable enterprises and assets end up in corporate hands.
Consider the typical family farm, not just in America but in Germany, Australia, etc. It’s hard work squeezing a livelihood from the land in a market dominated by a handful of global corporate giants and their state handmaidens, and so unsurprisingly many in the next generation have opted for corporate-state jobs in urban areas rather than shoulder the financial risks of continuing the family farm.
A neighboring farmer might be interested in buying, be he/she will have to borrow the money at (say) 4%.
The global corporation can sell bonds (i.e. borrow money) at less than 1%. The lower cost of capital enables the corporation to outbid local farmers for the land, and this low cost of borrowing also enables the corporation to fund capital-intensive economies of scale that are beyond the reach of family farms.
The net result is the nation’s farmland, its core productive asset, slides inevitably into corporate ownership. Anyone who resists selling out is crushed by low prices (corporate farms can over-produce and survive low prices, family farms cannot), or they are crushed by the disadvantages of being an “outsider” selling to the corporate supply chain, which favors in-house suppliers or large corporate producers.
…click on the above link to read the rest of the article…
