Some of them have done this even when their companies were doing very poorly, defying the basic market principle of linking compensation to performance.
Moreover, even when they injected public money into failing companies, governments made sure that they did not apply market disciplines. When it bailed out General Motors, the US government deliberately took shares that do not have voting rights (albeit with a priority in dividend payouts) so that it would not have any say in the management of the company.
The British government has taken over (with shares with voting rights) two of the world’s biggest banks — Royal Bank of Scotland and HBOS — but it refuses to order them to do its bidding, as any decent capitalist would have done to a company that he or she had taken over.
While being helped by government protection to make money, the rich have also been given special allowances to keep as much of it as possible.
As they spend significant resources tracking down and punishing welfare cheats, governments of the rich countries do nothing to close down tax havens, which have allowed many large companies and super-rich individuals to get away with paying less than their fair share of taxes.
Fortunately, the spread of Vidal’s “US” economic system may be meeting resistance.
The recent news about the French government’s injection of public money into struggling automaker Peugeot-Citroen in return for tough conditions on the company’s dividend payouts and reinvestment is a case in point.
The French government’s proposal being considered unusually eloquently speaks to the absurdity of the current situation, in which the rich get more government protection with fewer conditions, while the poor get increasingly less protection with increasingly demanding conditions. It is time to redress the imbalance.
Chang Ha-joon is the author of 23 Things They Don’t Tell You About Capitalism.