Monday, May 29, 2023
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Ignacio Muro Benayas

Transparency, do-gooder neoliberalism and "responsible capitalism"

Professor of Journalism at Carlos III University

That transparency would impose itself naturally in all spheres of life seemed a universally accepted consensus in the years before the crisis. The conviction had been established that information was an unstoppable source of transparency for the general public and that no social space, neither the economy nor the business world, would escape this logic.

Capitalismo y corrupcion

Somehow it was a logical dream. Visibility began to enter into spheres once thought to be sacred and opaque as churches (with denunciations of pederasty against bishops), political parties (corruption at the top) or the army (acceptance of homosexuality, denunciations of harassment). The same logic of transparency affected strictly private spaces such as family, so that the intimacy of the home no longer served to cover up mistreatment of women or child abuse of any kind.

Western capitalism, as appropriate to its "civilized character," seemed to assume these facts naturally as it appropriated the "myth of progress". Business schools made new "conflict" settlement schemes fashionable. The introduction of "ethical codes" was declared sufficient to build a good business government in which the first executives accepted to be controlled by "independent" advisers. From corporate lobbies and powerful corporate groups (including journalists and advertisers), "self-regulation" was fostered from which an obvious message emerged: they did not need the state to tell them what they had to do. They themselves, autonomously, were able to solve any collusion of interests that would damage the general interest. The companies "assumed" to be jointly responsible for the environment, gender equality and everything marked as politically correct. Neo-liberalism had settled in society and, along with it, the evolutionary myth of responsible capitalism.

A veneer of modernity conceales regressive capitalism

Behind these "new ideas" lies a powerful ideological message. Emphasizing the ethical character of these codes, we are insinuated that law, that is, the source of legitimacy emanating from democracy, was a mere political circumstance detached from public ethics. In emphasizing their voluntary nature, they sent us the message that the Civil Code or the Commercial Code, and in general the laws created to regulate the common good, were outdated because they rely on coercion, something unnecessary with good people. The power groups, the new princes of this world, did not need to submit themselves to common norms: they were above them. To ensure acceptable behaviour, the code of honour to which they submitted themselves voluntarily was sufficient, which princes and nobles in the past claimed for themselves. Were these patterns of conduct valid for the whole of civil society? Did they serve for workers, farmers, clerks? No, just for civilized groups, only for certain elites. They had initiated the privatisation of rights.

The power groups, the new princes of this world, did not need to submit themselves to common norms: they were above them

In fact, this varnish of modernity concealed regressive capitalism, subject to the short-term financial benefit that hegemonized the world. In 2001, ENRON, a pioneer US company in CSR, vested with authority to give honorary awards to prominent civil servants, (who bestowed one on Alain Greenspan in 1999), reveals that it was, in fact, a den of thieves. In 2008, the bankruptcy of Lehman Brothers revealed the disaster of the universal commercialization of the toxic assets from banks reputed to be "responsible" and with prizes to the good government. Shortly afterwards, the BP oil company, which boasts of its internal controls, off the US coast, causes one of the biggest ecological disasters. In Spain, the Observatory of Corporate Social Responsibility shows that nine out of ten IBEX 35 companies operate in tax havens.

What is presented as "responsibility" of the new capitalism is shown to be just words, mere propaganda. In February of this year, the 86 Spanish banks signed a code of good practice, which assumes part of the loss of the value of houses to avoid evictions, only resolved 8 cases of payment in 8 months. The myths of voluntariness come crashing to the ground. Even the British Financial Times, a long-time champion of self-regulation, acknowledged that "experience has shown that without pressure from the state, little can be achieved".

Private wastage is hidden from view


As the alibis collapse, new ideological strategies are needed. Think-tanks that build strategic thinking remove from the diary any allusion to corporate governance while highlighting the regulatory shortcomings of politicians. Hiding "market failures" requires removing the requirement of transparency on companies and starting to turn them on governments. The focus is on public inefficiencies and corruption so as to hide the extent of huge private waste and thus promote the illusion that the system remains interested in the fight against opacity.

The reality is that transparency in the economic world remains the pending issue and that there is no guarantee that it will be achieved. This process will be especially complex and will require avoiding diversionary manoeuvers that seek to divert the democratic energies of the central battles for the democratization of the productive system. These have to do with tax havens, the connection between financial speculation and privileged information, the monopoly of the power of the leading executives and the need for internal counter-powers in companies, the opaque influences of the big lobbies or the cross-over of interests between private and public from the so-called "revolving doors".

The reality is that transparency in the economic world remains the pending issue and that there is no guarantee that it will be achieved

What the world needs is to address both the root and the main problems of governance and transparency in the economic world at the same time. To trust that it occurs without great resistance, as "natural evolution" of the system, is to ignore the lessons of history.

Published in "Economistas frente a la Crisis" (Economists Facing up to the Crisis).

Ignacio Muro Benayas is Member of Economists Facing up to the Crisis, Professor of Journalism at Universidad Carlos III, Editor of



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