Klepto Capitalism

I came across this term while catching up on my 3QD posts. Klepto capitalism makes a lot of sense and it describes corporate America very well. How can a company pay its workers $50,000 per annum and give its top execs millions, if not billions, of dollars each year? I think that the worst culprits are in the financial sector, especially in merchant banks and investment banks, with their bloated end-of-year bonuses often going into millions. Even with the economic downturn, these ultra-rich are getting richer.

Klepto Capitalism (n.) — an economic system where publicly traded corporations are run not to produce value for shareholders but to provide obscene amounts of wealth for CEOs and top executives.

What we have in the United States is no longer capitalism but klepto-capitalism: a system where publicly traded corporations are run not to produce value for shareholders but to provide loot for a new class of corporate mega-thieves.

0 Responses to “Klepto Capitalism”

  1. 1 Pat LaFollette January 14, 2012 at 03:48

    Is everyone asleep? Why two years without a reply?

    Your definition of Klepto-Capitalism needs to be extended beyond executive compensation (a symptom and relative drop in the bucket) to include all aspects of corporate business practices that rewards sociopathy in the executive boardroom: Business models based on fraud, deceit, collusion, price fixing, market manipulation, predatory lending and marketing schemes, hidden charges, deliberately ambiguous or misleading contracts, unfair labor practices, hiding profits overseas to avoid taxes, buying politicians and regulators…. It could be a very long list. A central function of government should be to defend its citizens (and itself) against Klepto-Capitalism and the slide towards neo-fudalism. This will never happen so long as political control can be bought and paid for by corporations and the super-rich.

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