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.

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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)

"Scientific Management" is predicated on differences in knowledge about labor processes – information differentials.  To 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.

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.

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.

Information and Corporate Power.  Under modern free enterprise capitalism, profits are extracted from workers and then redistributed among corporations in processes predicated upon information differentials.  These processes are sanctified by capitalist ideologues in the names of efficiency and private initiative, but their real significance lies in their providing "successful" paradigms for valuing outcomes predicated upon information differentials in the political sphere.  In fact the power of the entire corporate sector in America is based on activities effectively concealed from the public.

Three areas are critical to the maintenance of corporate power in America: domestic politics, foreign affairs, and the system of criminal justice.  The salient feature of each of these areas of activity is its inaccessibility to public consciousness.

Domestic Politics.  The fundamental proposition underlying domestic politics in the United States is this: the free enterprise economy distributes national wealth, and it does so independently of the political system.  The widespread acceptance of the validity and desirability of this proposition is critical to the hegemony of the corporate sector because its consequence is a depoliticized public – if politics is supplemental to the economic system, then politics has an inferior claim on the public's attention – when political power is the only force capable of controlling the corporate sector.

The fundamental proposition is only half-true, however.  Indeed, the free enterprise economy distributes national wealth in America, but it does not accomplish this result independently of the political system.  The main business of domestic politics in America is the maintenance of the free enterprise economy, and this requires continuous and substantial governmental expenditures.  Without these expenditures the free enterprise economy would collapse. (5)

That the free enterprise economy requires political underwriting for its survival and is not a self-sustaining, beneficent, efficient, and impersonal allocator of national wealth, is the great secret of domestic politics in America.  If the secret were not kept from the overwhelming majority of Americans, they would realize that government is necessary rather than peripheral to their welfare, and they would become interested in domestic politics, to the inevitable detriment of corporate power.  To maintain the secret, corporate interests have kept domestic politics effectively closed to public consciousness.

Consequential governmental proceedings have always been conducted in complete secrecy in the United States, in "executive session." [And virtually all governmental proceedings are effectively secret, due to the exclusion of live television from their coverage.  This ban on live television coverage of even inconsequential governmental proceedings is justified as necessary to protect "the integrity of the deliberative process;" it is also justified on the grounds that live television coverage would be biased toward the politics and politicians favored by television program directors.  But beneath these excuses resides an awareness in the minds of corporate politicians that opening up inconsequential governmental proceedings to live television coverage could lead to a demand for similar coverage of consequential government proceedings; and this would result in a political education of the public of such proportions as to threaten the continuance of the primary domestic political activity itself – the maintenance of the free enterprise economy.(6)]

Foreign Affairs.  If the insulation of domestic politics from public consciousness is both necessary to and validated by the myth in America that business is what matters and politics is too unimportant for public attention, the insulation of foreign politics (foreign affairs) from public consciousness is both necessary to and validated by the myth that they are too important for public attention.  According to the strong version of the latter myth, public influence upon foreign relations is pernicious, a thesis which pervaded the American foreign policy establishment long before Walter Lipmann concluded, at the high tide of the cold war, that it was jingoistic public opinion in England in 1914 and pacifistic public opinion in the 1930's that brought about the world wars. (7) A similarly blatant expression of the anti-democratic attitude shared by American foreign policymakers – an attitude so common it is almost always assumed rather than elaborated upon – was Henry Kissinger's justification of secret Egyptian-Israeli negotiations in 1977 on the grounds that secrecy permits negotiators to be more flexible and not locked into positions their constituencies support.

Such anti-democratic attitudes derive mainly from the fundamentally anti-democratic foreign policy which American foreign policymakers pursue.  Hence the broadening of the class origins of the foreign policy establishment from a narrow Eastern elite before World War II to a diversified national group – corresponding as it did with America's attempt to consolidate a global corporate imperium – had no democratizing effects.  And the essential activities required to maintain America's global corporate hegemony – the systematic force, bribery and manipulation that have come to be subsumed under the heading "covert CIA activities" –  are kept secret not primarily because otherwise the American public might disapprove of them, but because revealed in the victimized countries they would lose much of their effectiveness.

That secrecy is righteously and routinely justified by American foreign policy-makers as necessary to the conduct of foreign affairs should be appalling.  That the justification is swallowed whole by the American public simply demonstrates the effects upon the public of forty years of foreign policy being formulated and carried out in the shadows.  In the words of Adam Yarmolinsky, "There are surprisingly few operationally significant questions for the policymaker as to which any public opinion, in my view, exists at all.” (8) 

Secrecy in the formulation and conduct of American foreign policy – necessary to its ends and reflecting the deep-seated anti-democratic biases of foreign policymakers – has rendered the public inert and thereby given American foreign policy great stability and a probably even greater appearance of stability.  It has also done more.  Secrecy has played a further critical role in the selling of particular foreign policies, enabling policymakers to describe foreign situations in ways at variance with reality in order to command support for specific, usually military, policy options.  This bludgeoning function of secret foreign intelligence may be beginning to come under the scrutiny of scholars of American history. (9)  

The System of Criminal Justice.  Trials of persons accused of violating the criminal law are public in the United States, but the trial stage is the only part of the system of criminal justice that is public.  Secrecy is justified in pretrial stages – the investigative and indictment stages – to protect police "informant systems" and to insure defendants "a fair trial."  The questionable primacy of the first justification and validity of the second aside, the main result of pretrial secrecy in the system of criminal justice is the concealment of illegitimate police activities – the infiltration and harassment that comprise the initial measures of political repression.  Secrecy is justified in the post-trial stage – the incarceration state – by "custodial considerations;" convicted criminals, and indicted persons who cannot post bail, lose their right to free speech.  The result is capital punishment without public cognizance, the final measure of political repression. 

Consequently, only a tiny fraction of the system of criminal justice is public in the United States, and only a tiny fraction of the whole is non-violent and non-abusive.  And the contours of the American war on political dissidents remain effectively veiled.  

The Myth of the Open Society:  Secrecy and the Newspress.  In the land of the blind, the one-eyed man is king.   Upon the newspress falls the responsibility of sustaining the myth that the United States’ political economy is fundamentally open, with pockets of secrecy, rather than fundamentally defined by information differentials, with apertures of openness.  But in fact the newpress is required by law, directly or indirectly, to respect all of the political eoconomy’s major concealments.  These laws enact the least cumbersome form of censorship – prior exclusion – and deny the newpress access to four areas of conflict whose exposure would drastically  undermine corporate power vis-a-vis the rest of American society.  These four areas, with the paramount interests said to justify the exclusion of the newspress from each, are:  

·          Labor processes and corporate business practices (proprietary information).              

·      The system of criminal justice (integrity of police procedures, fair trial and custodial considerations.                    

·           Domestic governmental proceedings (integrity of the deliberative process).

·           Foreign affairs (national security). 

In addition to its legal exclusion from forbidden areas, because the newspress' profits depend on the profits of its corporate advertisers, it has a financial interest in self-censoring reportage that would lessen its advertisers' profits.  Since coverage of forbidden areas would undermine corporate power and wealth, the newspress does not provide such coverage. 

Non-coverage of forbidden areas by the newspress is explained then, by three factors: (1) the power of the dominant participants to legally exclude the newspress; (2) the newspress' financial interest in not undermining advertising revenue; and (3) the newspress' acceptance of both the pre-eminence of the paramount interests justifying non-coverage and the incompatibility of those interest with coverage.  What coverage of forbidden areas there is requires espionage and betrayal.  But it should not be surprising that the newspress is required to resort to these methods to pierce the pervasive and doctrinal secrecy surrounding consequential governmental and corporate activities; in such cases, the ends define the means.

Credibility in Crisis?  If the resiliency of American politics reflects a capacity to define issues having structural causes by construing them as questions of personalities, the Pentagon Papers and Watergate cases are perfect examples of the process at work.  The villains of both pieces have been almost universally identified as particular politicians who lied, rather than a secrecy system that makes such lying inevitable because profitable.  So reform assumes the character of a "post-Watergate mentality", and a new President declares "I will never lie to you." 

"Credibility," of course, is a personal trait; and the credibility gap is simply the most recent and egregious testament to the enduring strength of the myth of the open society.  Since all lies, except those referring to states of mind, are predicated upon objectively discernable differences in information, the credibility gap has always rested upon "information gaps." 

Much else also rests thereupon.  

Footnotes    

1. Harry Braverman, Labor and Monopoly Capital (New York, 1974), p 119.  Italics in the original.  Braverman also writes: "A comprehensive and detailed outline of the principles of (Scientific Management) is essential. . .because. . .(they are). . .nothing less than the explicit verbalization of the capitalist mode of production."  Ibid., p 86. 

2. "Free market" capitalism refers to the form of capitalism characterized by markets in which profits are distributed relatively free of governmental direction.  ("Fascism" is the form of capitalism characterized by governmentally mandated profit distribution.  "Free market" and "fascist" capitalism are end points on a spectrum, of course, to which no existing capitalist system fully corresponds.) 

3. A not insubstantial fraction of the redistribution of corporate profits through financial markets is random.  See Lester C. Thurow, "Tax Wealth, Not Income," in The New York Times Magazine (April 11, 1973).  To the extent it is not random (which is what is of interest to rational investors), the redistribution is largely determined by information differentials. 

4. By means of the price mechanism in a price competitive environment, or by means of increased promotional efforts otherwise, profits are redistributed from corporations which have not adopted improved production techniques to corporations which have. 

5. The acceptance by the business sector in America of the fact that public investment must supplement private investment, in order for the economy not to stagnate, constitutes the essence of the "Keynesian Revolution."  That public investment is not justified as maintaining the free enterprise economy – but rather as necessary to national defense, public transportation, health, welfare, etc. -- in no way alters its maintenance effects or the fact that such effects are understood and accepted by the business sector. 

6. Possibly still intoxicated by the television coverage of Watergate, here I obviously underestimated the powers of legislators to limit television’s coverage of legislative proceedings to only those of symbolic significance.  (Footnote added in 1995.) 

7. Walter Lippmann, The Public Philosophy (Little, Brown & Company, 1955).  For an even more telling source of the cold warrior thesis that public pacifism in England let to World War II, see John Kennedy, Why England Slept (Funk & Wagnalls, 1961). 

8. Quoted in Bernard C. Cohen, The Public's Impact on Foreign Policy (Little, Brown & Company, 1973), P 82.  An excellent book limited to non-military aspects of foreign policy; its conclusions belie its title. 

9. Richard W. Steele, "Franklin D. Roosevelt and His Foreign Policy Critics," in Political Science Quarterly Spring, 1979), 15.   Also see the book reviews by Barton Bernstein in recent issues of Inquiry magazine. 

(Written 1975 – 1995)

Authors Bio:
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 Service in San Francisco as a Clerk-Typist, GS-4. I was active in the USFS's union for several years, including a brief stint as editor of The Forest Service Monitor, the nationwide voice of the Forest Service in the National Federation of Federal Employees. Howsoever, I now believe my most important contribution while editor of the F.S.M. was bringing to the attention of F.S. employees the fact that the Black-Footed Ferret was not extinct; one had been found in 1980 on a national forest in the Colorado. In 2001 I retired from the USFS after attaining the age of 60 with 23 years of service. Stanford University was evidently unimpressed with my efforts to make USFS investigative reports of tort claim incidents available to tort claimants (ie, "the public"), alleging the negligence of a F.S. employee acting in the scope of his/her duties caused their damages, under the Freedom of Information Act. Oh well. What'cha gonna do?