Dickson C. Igwe. Photo: VINO/File

OK. In his preaching on the need for a new capitalism that will power social and economic prosperity in the west, in the decades ahead, Economist and Nobel Peace Prize Laureate Joseph E. Stiglitz has described the malevolent market power today’s trillion dollar corporations possess.

These are super businesses that have the power to control consumer prices, the supply of goods and services, and consumer demand, far beyond the borders of the countries their headquarters are based, and owners originate.

Corporations today seek raw power, and not simply market productivity. This is termed “Rent Seeking.” Rent seeking is control of markets and the societies where those markets operate, not simply by economic and commercial means, but by any means necessary; and that means political and social control: think the USA Military Industrial Complex - powerful businesses- that drive US defense and intelligence policy.

The prime aim of the modern corporation becomes not simply profitability. It is about political power, and total control of the market environment, including political and social control.

Corporations today influence and change the political infrastructure for the purposes of control. Growth and innovation have taken a back seat. Political power is viewed as far more potent than mere commercial power.

The challenge is that the concentration of political and social power at the pinnacle of the wealth pyramid has driven social inequality, and suppressed the social, economic, and political power, of the western working and middle classes.

The result of social and wealth inequality has been low productivity, anemic demand, and low economic growth.

Why: because when the middle classes and those at the lower end of the social and wealth pyramid- the mass of the population- have spending power free of debt, the growth of the economy has historically been stronger, than when wealth is in the hands of a tiny minority, that has traditionally been frugal in its spending.

When the mass of the population suffers fear of unemployment, low wage employment, and rising debt, the macro economy grows anemically, if at all.

On the other hand, if the power at the top of the pyramid has been grabbed by the .001%, that has built its wealth to astronomic proportions, to an extent where this group controls three quarters of global wealth, any return to greater equity becomes a ‘climb to the summit of Everest.’

Consequently, the one organisation with the power to stop this takeover of the world by the super wealthy and their corporations is truly democratic and representative government.

In the Progressive Capitalism Model, the task of government is to work on the side of the consumer and working man and woman, and to encourage workers to come together for a better deal.

Government is on the side of the struggling majority, not the super wealthy minority. Governments must invest in human capital to boost economic productivity; drive infrastructure investment that opens the door to competition; and intervene when super corporations become a social menace.

The preceding may appear Utopian, but is necessary if the world is to avoid the upheaval and even tragedy wealth inequality may drive.

Rising anarchy, public anger, and devastating migration patterns, point to a world in upheaval. Only governments backed by enlightened masses can avert the pending disaster.  

The great limitation in the pursuit of Progressive Capitalism is the “how to.”

What will be the agent of change? It will not be big business which stands to lose its power and privileges. It certainly will not be the 1% that has seen their already astounding wealth increase to an even greater level. And it will not be the ruling politicians on the right mainly, who need powerful corporate friends and allies to remain in power.

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