Introduction: The Social-Corporate Welfare State

Abstract

Warren Buffet, then the third wealthiest individual in the world according to Forbes Magazine,¹ with an estimated wealth of $47 billion, gave an interview to the New York Times in 2010 where he stated the following:

Just over two years ago, in September 2008, our country faced an economic meltdown … One of Wall Street’s giant investment banks had gone bankrupt … A.I.G., the world’s most famous insurer, was at death’s door. Indeed, all of corporate America’s dominoes were lined up, ready to topple at lightning speed: 300 million Americans were in the domino line as well. Well, Uncle Sam, you delivered … I would like to commend a few of your troops. In the darkest of days, Ben Bernanke, Hank Paulson, Tim Geithner and Sheila Bair grasped the gravity of the situation and acted with courage and dispatch.

(Buffet, 2010)

The size of ‘Uncle Sam’s’ intervention in 2010 was equivalent to around 85 per cent of total US gross domestic product (GDP). Although some of the interventions by the US and other govern?ments did not require upfront funding, and although the costs of some measures will be recouped in time, the economic crisis that hit most countries in some way swiftly put paid to the myth — propagated during the previous neoliberal phase of capitalism — that businesses thrive best with minimal state involvement or interference.