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The Political Economy of Secrecy

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Introduction.   Information is power.  In a society organized according to principles of rationality and justice, information will be universally available and widely diffused, permeating the social order with power.  In a society organized according to capitalist principles, information will be concentrated in the hands of a ruling class and its agents, augmenting and even displacing the force required to maintain capitalist inequities.  The burden of the following essay is to argue that differences in information – information differentials – are intrinsic to the capitalist mode of production; and that under free market capitalism this mode of production is reproduced in the post-investment redistribution of profits among corporations, itself largely determined by information differentials; and finally, that in America the corporate sector as a whole maintains its hegemony only by concealing from the public the most basic features of domestic politics, foreign affairs, and the system of criminal justice.  In short, information differentials both define and critically conceal the distribution and exercise of power throughout the American political economy. 

Information and the Capitalist Mode of Production.   According to Braverman the essence of the capitalist mode of production is its transformation of working humanity into an instrument of capital, a transformation achieved by the separation, within each labor process, of conception from execution.  This separation has always characterized the capitalist mode of production and, with the advent of "Taylorism" or "Scientific Management" after 1890, was itself conceptualized and verbalized as a theory of management.  Braverman describes the theory of Scientific Management: ". . .the first principle (of Scientific Management) is the gathering and development of knowledge of labor processes(;) the second is the concentration of this knowledge as the exclusive province of management – together with its essential converse, the absence of such knowledge among workers (; and) the third is the use of this monopoly over knowledge to control each step of the labor process and its mode of execution." (1)

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"Scientific Management" is predicated on differences in knowledge about labor processes – information differentialsTo the extent industries are managed "scientifically," the role of unemployment in the disciplining of the labor force is subordinated to that of "Scientific Management."  And the scale and intensity of the exploitation of labor is increasingly determined by how effectively management monopolizes its "knowledge to control each step of the labor process and its mode of execution."

Information and the Redistribution of Capitalist Profits.  The magnitude of the exploitation of labor under capitalism determines the initial distribution of capitalist profits.  Under free market capitalism – still the predominant form of capitalism – this initial distribution is only temporary, however, because the dynamics of the accumulation process compel corporations intending to augment profits to invest the fruits of exploitation, most significantly in the financial markets and in technology. (2)  And according to how successfully they are reinvested, corporate profits are redistributed.  But how successfully corporate profits are reinvested in the financial markets and in technology, under free market capitalism, is a function of information differentials.

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Financial Information Differentials.  A redistribution of corporate profits results whenever an event occurs having predictable consequences for the profits of corporations, if different investors learn of the event's occurrence at different times.  A most notorious example of the phenomenon was the Rothschilds' killing on the London Stock Marked in 1815, made possible because they learned, some hours before the rest of England found out, that Napoleon had been defeated at Waterloo.

Even better than knowing before other investors that an event has occurred is having prior knowledge that it will occur.  Prior knowledge of the planned activities of corporations themselves constitutes the single greatest source of financial information differentials in America's free market economy, and where not obtained by conspiracy, bribery, or coercion, such information is sought by corporate espionage. (3)

Technological Information Differentials.  A redistribution of profits results when any corporation increases, vis-a-vis competing corporations, the output of labor and materials by technological improvement. (4)  Such improvements may be patented and so legally, though seldom for long effectively, protected from expropriation by other corporations.  Patents are both licenses to profit from technological information differentials and schematizations of the differentials themselves.  Because the latter feature renders patents so easily infringed, most technological improvements are not patented; they are protected by secrecy only.

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Free Enterprise.  The capitalist economic system predicated upon the redistribution of corporate profits according to differentials in financial and technological information – "free market" capitalism – is commonly called the "free enterprise system."  In the American free enterprise system, corporate espionage does a greater volume of business yearly than the housing construction industry.

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I have a law degree (Stanford, 66') but have never practiced. Instead, from 1967 through 1977, I tried to contribute to the revolution in America. As unsuccessful as everyone else over that decade, in 1978 I went to work for the U.S. Forest (more...)

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