Regime Change Begins at Home: Freeing America from Corporate Rule

Regime Change Begins at Home: Freeing America from Corporate Rule

by Charles Derber

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In this timely book, Charles Derber argues that the current regime - the American system of corporate control born two decades ago and now led by President Bush - is destroying the American dream by outsourcing millions of jobs, turning American employment into a "one-night stand," undermining the security that created the American middle class, and


In this timely book, Charles Derber argues that the current regime - the American system of corporate control born two decades ago and now led by President Bush - is destroying the American dream by outsourcing millions of jobs, turning American employment into a "one-night stand," undermining the security that created the American middle class, and turning the forces of law against citizens. The book outlines specific strategies, including how to approach 2004 and how to move the country in a new direction over the long term. Part I discusses the history of the corporate regime and the damage it has done to American workers and the country. Part II examines the bad faith at the heart of the regime today, and why it must resort to wars of deception to survive. Part III looks at 2004 and battling Bush as a step toward regime change. Part IV lays out a vision and strategy for regime change over the long haul.

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Praise for People Before Profit: "A provocative and stimulating work, directed to issues of the highest significance."

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Berrett-Koehler Publishers, Inc.
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Berrett-Koehler Publishers, Inc.

Copyright © 2004 Charles Derber
All right reserved.

ISBN: 978-1-60509-294-2

Chapter One


Regime" has a nasty ring to it. We hear about Saddam Hussein's regime, the North Korean regime, Fidel Castro's Communist regime, the radical clerical Iranian regime, or the Syrian dictatorial regime. You get the idea. A foreign government that is repressive, and that U.S. leaders would like to see eliminated, will get branded in the United States as a "regime."

That is why the idea of an "American regime" seems so strange to Americans, who have been conditioned to think of regimes as bad governments somewhere else. Have you ever imagined the term can be applied at home? Maybe not, but the dictionary makes clear that the term applies to any "system of rule," at home or abroad. Europeans, Africans, Latin Americans, Middle Easterners, and Asians talk frequently about the "American regime," which they fear and mistrust.

Regimes are institutionalized systems of power, good or bad, that rule a nation. Every regime is like a political house built around five great pillars. The pillars usually support the ruling elites, but in democratic regimes they can empower the people. The architecture of the house and the design of its pillars reflect the underlying balance of power in society. The groups or organizations that control money tend to design and run the "house."

President Bush is the United States's most recent and extreme regime leader. He has done some expensive renovation of the pillars, in collaboration with the big monied interests that helped put him in office. He has changed the façade of the regime but not its underlying structure or aims.

Regimes cling to power, claiming that God or nature has ordained them. A nineteenth-century regime leader, John D. Rockefeller, said, "The growth of a large business is merely a survival of the fittest ... the working-out of a law of nature and a law of God." This sort of rhetoric is popular in the current regime, with neoconservative ideologues from the Reagan to the Bush administration portraying the American "free market" system as part of nature, and corporate capitalism as the highest stage of social evolution. One of the regime's favored thinkers, Francis Fukuyama, a former Reagan administration official and now professor of public policy at George Mason University, calls the current American order "the end of history," evidently God's and man's most perfect creation. But while the new corporate regime is deeply entrenched and controls the public conversation, it has not ended history, which in the United States consists of a never ending contest between the existing regime and those seeking regime change. America's first ruling elite was the British colonial authority, a victim of the most dramatic politics of regime change in the nation's history: the Revolution. Under George Washington's first presidency, a Hamiltonian business regime warred with and ultimately triumphed over Jeffersonian Republicanism, to be followed by a succession of new regime changes. While you won't read about regimes in most history books, American history is a series of fascinating regimes and regime changes. The modern history of U.S. regimes began immediately after the Civil War, when the earliest American corporate regime was born. Art Garfunkel sang "Don't know much about history," but if you want to understand the current regime and how it uses power against you, you have to know its history.


The first corporate regime was born with a bang after the Civil War. John D. Rockefeller, J.P. Morgan, and other robber barons built America's first great national corporations in one of the world's most impressive bursts of economic dynamism and abuse of power. The regime developed as a marriage between the robber barons and the presidents of the era. Republican presidents Grant, Harrison, Garfield, Arthur, and McKinley and Democrat Grover Cleveland all carried water for the new captains of industry. The robber barons dominated American society from the end of the Civil War until 1901.

Sound familiar? The parallels between this first corporate regime and the one today are haunting. The late-nineteenth-century robber baron regime created many of the historic companies, such as Chase National Bank (now J.P. Morgan Chase), First National Bank and National City Banks of New York (now Citigroup), Standard Oil (now called Exxon), and U.S. Steel (now called USX), which, after various mergers, still dominate America. It was the first regime to flood politics with corporate money and create all-powerful corporate lobbies in Washington. Rockefeller's aides, with briefcases literally stuffed with greenbacks, worked in the offices of senators' who wrote legislation on oil, banking, and other industries. It's no secret why they were called "robber barons." They used their influence over presidents to send in troops when workers tried to organize, and they helped write tax laws that created a huge and growing gap between the very rich and everyone else. We live in a born-again robber baron regime, with the corporations bigger and more global, and their domination of Washington even greater.

Despite its awesome power, this first corporate regime faced a radical challenge by the Populists, fiery farmers and plainspoken people from the heartland who created the People's Party in 1892, captured the Democratic Party in 1896, and launched one of the country's most important politics of regime change. They proclaimed in 1892 that corporations were being used "to enslave and impoverish the people. Corporate feudality has taken the place of chattel slavery." While the Populists melted away with the 1896 presidential defeat of their candidate, William Jennings Bryan, they helped give rise to the reform movement of the Progressive Era under the "trust-buster," President Theodore Roosevelt. In 1907, Roosevelt called for "the effective and thorough-going supervision by the National Government of all the operations of the big interstate business concerns," a direct challenge to the "free market" regime discourse of the robber barons. Roosevelt was no revolutionary, but he did engineer his own regime change politics, culminating in his effort to create a Bureau of Corporations that would put limits on the strongest Rockefeller, Morgan, and other robber baron fiefdoms. Corporations had to restructure themselves and embrace a measure of public accountability, as the Progressive Era consolidated political power in a new regulatory regime quite different from the robber baron order. The eminent historian of the Progressive Era, Gabriel Kolko, labeled the resulting government-led regime "political capitalism." The Gilded Age corporate regime passed into oblivion.


The Bush administration resembles not just the Gilded Age presidencies but also the Republican presidencies of the 1920s, which presided over the nation's second corporate regime. The Harding, Coolidge, and Hoover administrations abandoned the regulatory impulse of the Progressive regime and turned Washington back to big business. While less constitutionally extreme than the Gilded Age presidents, they created a regime of corporate hyperpower, dominated by an ideology of corporate self-regulation and paternalism. They proclaimed a union-free world known as Plan America, a vision of corporate paternalism in which big business would house and educate workers and provide them with medical care and retirement. Plan America was a vision of a whole society wrapped in a benign corporate cocoon, without need for government regulation or unions, previewing some of the views about corporate responsibility fashionable in the current regime. President Hoover said that the government "owes nothing" to himself or any citizen, since the business world had created opportunity for everyone and could police itself. The Roaring Twenties saw an era of overwhelming corporate dominance enlivened by booming prosperity, scandals such as Teapot Dome, and a huge stock market bubble that popped in 1929. The regime ended with market collapse and the victory of President Franklin Roosevelt in 1932.6

Spurred by the Depression and the recognition that capitalism could be saved only under a different order, Roosevelt created the New Deal, a regime that established basic rights for labor, codified in the Wagner Act, and created an entirely new social welfare system built around Social Security. The New Deal did not end corporate power, but it turned the government into a limited agent of countervailing power and sought to preserve a public sphere, whether in the health system or in the post office, safe from corporate predators. Economist John Kenneth Galbraith wrote at the height of the New Deal that the federal government's main peacetime role is to rein in corporate power, a statement that no established thinker or politician could have entertained in the Gilded Age or Roaring Twenties regime.


The New Deal regime survived almost fifty years, profoundly changed the nation, helped enshrine the labor movement as a new force, and redefined the Democratic Party. But it, too, succumbed, as neoconservative radicals in the 1970s spurred a politics of regime change leading to the election of Ronald Reagan in 1980. In Chapter 3, I explore the many reasons for this all-important regime change, as dramatic as the one engineered by Rockefeller and Morgan. As a new generation of robber barons entered into a marriage with the Reaganite political class in Washington, they created a regime whose power is now compared with the Roman and British Empires. It rules not only America but much of the world.

The third corporate regime is the house we live in today. George W. Bush is just the current master of the mansion. The basic design of this regime was established by Reagan a quarter-century ago.


The foundation pillar of the regime is the transnational corporation, the biggest concentration of cold cash in human history. The companies dominating the regime—giants such as Wal-Mart, General Motors, General Electric, Exxon, Citigroup, Bank of America, Verizon Communications, Phillip Morris, and Microsoft—are wealthier than most countries. Citigroup has total assets of over a trillion dollars, to be precise one trillion, one hundred eighty-seven million! Wal-Mart employed 1.3 million workers in 2003. General Motors' annual sales in 2000 were larger than the gross domestic product (GDP) of Hong Kong, Denmark, Thailand, Norway, Poland, South Africa, and 158 other countries. Of the 100 largest economies in the world in 2001, 51 were corporations, and only 49 were countries (based on a comparison of corporate sales and country GDPs). Big business has existed under every U.S. regime since the Civil War, but the third corporate regime is creating a world where companies are replacing countries as the superpowers. They make the corporations of earlier regimes look like pygmies.

Two hundred corporations sit at the heart of the regime, led by the Top Ten. These Top Ten alone have assets worth about $4 trillion. That is $4,000,000,000,000! But you'd have to add on GM, Ford, J.P. Morgan Chase, Microsoft, and scores of other behemoths to get the picture. Four trillion dollars is just a fraction of the wealth controlled by the two hundred intertwined giant companies that control the regime.

These firms' size reflects the rise of a truly transnational corporation, whose unique global character is uniquely threatening for U.S. workers. We have long had global corporations, but never the transnational form of company that—at lightning speed and on a mass scale—can transfer abroad production of virtually every good and service. Not just the size but also the distinctive reliance on foreign labor and the approach to global profits differentiate transnational firms and the third corporate regime from previous incarnations. Today's corporation has turned "trade" into something quite new: a way to use U.S. capital to employ cheap foreign labor at the expense of American jobs. Trade becomes an internal transfer within the global corporation itself, maximizing profit by uniting U.S. capital and technology with foreign workers unprotected by labor laws or regulations. This inevitably produces the mass outsourcing of jobs that has now exploded into one of the great political issues of our time, and it serves notice that the core economic interests of the third corporate regime will increasingly diverge from the interests of American workers and citizens.

Two hundred corporations, eighty-two of which are American, dominate the global economy, producing 27.5 percent of the world's total economic activity. The regime serves the U.S. companies most directly but promotes global trade and investment rules benefiting all the top two hundred. Their combined sales are now greater than the combined economies of all countries minus the biggest ten, and eighteen times the combined annual income of the 1.2 billion people (24 percent of the total world population) living in "severe" poverty.

What do all these numbing numbers mean? For one thing, huge inequality. The top three shareholders of Microsoft own more money than do all six hundred million people in Africa. Bill Gates and Warren Buffet, the two richest corporate moguls, have more wealth than the poorest fifty million Americans. Beyond this, corporations make out like bandits in many ways. The share of federal taxes paid by corporations dropped from 23.2 percent in 1960 to 11.4 percent in 1998. In 1998, Texaco, Chevron, Pepsi Co., Enron, WorldCom, McKesson, and the world's biggest corporation, General Motors, paid no federal taxes at all.

In the third corporate regime, we are all corporate constructions. We get our dreams and opinions from corporate media such as Fox or Disney; our children's education is based on curricula provided by Microsoft or AT&T; our food comes from Phillip Morris and Wal-Mart, the world's largest grocers; our credit cards and mortgages are granted by one-stop superbanks such as Citigroup or J. P. Morgan Chase. Corporations pry away from government anything that is profitable and increasingly deliver our education, health care, social services, and even law enforcement. Everything is for sale since the regime's purpose is to promote profit above all else.

As they seek to make the entire social order profitable and marketable, corporations are remaking everything in their own image, including government itself. Governments look and act more like companies, and corporations present themselves more as governments. Governments act to protect profits, and corporations speak the language of social responsibility. Business takes on the planning and rule-making roles of government, and government becomes increasingly about money.


OK, it's not a pretty word, but it describes an ugly reality. To understand corpocracy, look at George W. Bush's cabinet, a Who's Who of corporate America.

PRESIDENT GEORGE W. BUSH Former CEO of Texas Rangers and Board of Directors of Harken Energy

VICE PRESIDENT RICHARD CHENEY Former CEO of Halliburton, Inc., the huge energy and defense conglomerate

SECRETARY OF DEFENSE DONALD RUMSFELD Former CEO of General Instrument Company and of the drug giant G. D. Searle and Co.

FIRST BUSH SECRETARY OF TREASURY PAUL O'NEILL Former CEO of Alcoa and of International Paper Co.

SECRETARY OF THE TREASURY JOHN SNOW Former CEO of CSX, the railroad giant, and Chairman of the Business Roundtable, the leading big business group in America

TRANSPORTATION SECRETARY NORMAN MINETTA Former Corporate Vice President of Lockheed Martin

LABOR SECRETARY ELAINE CHAO Former Vice President of Bank of America

AGRICULTURE SECRETARY ANN VENEMAN Former Board of Directors of Calgene, Inc., a subsidiary of Monsanto Corporation


Excerpted from REGIME CHANGE BEGINS AT HOME by CHARLES DERBER Copyright © 2004 by Charles Derber. Excerpted by permission of Berrett-Koehler Publishers, Inc.. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Meet the Author

Charles Derber, author of Corporation Nation and The Wilding of America, is Professor of Sociology at Boston College.

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