Tuesday, March 09, 2010

Is corporate power more dangerous than governmental power?

Tom Stiles argues that it threatens our democracy. As Acton said, power tends to corrupt, and absolute power corrupts absolutely. I am more deeply concerned about the corrupting effect of power in the hands of large, multinational corporations than I am with the idea of too much government. Corporations potentially can buy and control government. It seems to me that they, and not government, are the Leviathans of our time.

Do conservatives see the problem? Do they think it isn't a problem? Why not?

When a company gets sufficiently big, the usual market pressures that might keep it from doing evil seem to me to become reduced.

25 comments:

Bilbo said...

Preach it, brother!

Bilbo said...

Where have all the conservatives gone?

Crude said...

Right here, Bilbo.

Victor, do you not see the glaring problem with your statement here? We should be afraid of corporations more than government because of the massive problems that could come... when they control the government.

Do you realize that the problems that can come when the wrong person is at the helm of government - the problems that come when government is endowed with far too much power, making it attractive to everyone from corporate heads to would-be utopians to everyone else - is a core reason of why so many conservatives urge for there to be *less* government power?

In other words: Making the argument that we should be more worried about corporations rather than government, *because corporations may end up controlling the reins of government*, supports the conservative claim that reducing the power of government (certainly centralized, federal power) is a prime interest.

Why should conservatives of a libertarian or small-government bend have a problem with what you say here?

RM said...

Different schools of conservatism, Victor, have always been suspicious of corporate power. Three immediately come to mind: the Southern Agrarians, Russell Kirk, and Wendell Berry.

But can you give some actual examples of what you are talking about? Of how MNCs are buying and controlling government, and so forth.

Anonymous said...

Bob Prokop writing:

Yes, we should fear corporate power more than government power, at least in this country. Why? Because corporate leaders are unelected, and therefore cannot be voted out when citizens do not like what they are doing. Elected government officials (at least in theory) have a certain degree of accountability to the voters.

Crude said...

"Because corporate leaders are unelected, and therefore cannot be voted out when citizens do not like what they are doing."

The claim, Bob, is that corporations are capable of "buying and controlling" the government. If the government is under A-OK control such that we don't have to worry about this kind of takeover (if they try, we'll just vote them out!), then the original complaint by Stiles and (it seems) Victor falls apart. We don't need to fear corporations more after all - they can't do what's claimed.

Of course, if it's admitted that government can be taken over by corporations - and that it can be taken over by others (agenda-driven policy wonks, etc) - then we're right on back to what I said: What was given here was actually an argument in favor of weakening the power of government. Lest it be manipulated by those with the power to "buy and control", or otherwise manipulate the system.

Or maybe all this fretting over the power of people to control government is a lark, and the real desire is that the damn thing be as powerful as possible so long as it's controlled by the right people. I notice, for example, that for all the screaming about the Patriot Act while Bush was in office, the fact that it was just renewed (with a Democrat-controlled house and senate, with a Democrat in the White House) went quietly unmentioned in comparison.

So who's with me here? Who values individual liberties and freedom enough to weaken government to keep it from being taken over and manipulated by corporations and other groups?

I suspect the chirping of crickets.

Anonymous said...

Bob Prokop writing:

No crickets here. I was opposed to the Orwellian-named Patriot Act during the Bush administration. I remain equally opposed to it today.

Anonymous said...

I haven't read the article yet, but it seems like the point is corporations have a dangerous amount of power regardless of the size of the government.

How would the lack of government oversight stop Wal-Mart, for example, from establishing a massive monopoly that controlled the price of food for 90% of Americans? They've tried to do this before and it was only government intervention that stopped them.

Corporations would be more powerful in the absence of government, not less.

Crude said...

"Corporations would be more powerful in the absence of government, not less."

Not according to the OP for this thread. The claim on the table is that corporations are capable of "buying and controlling" government. Ergo, more government is more potential power for the corporations (and others). If you disagree that claim, do say so.

Also, nowhere is anyone suggesting an absence of government, unless absence is the new word for "less power granted to the government".

"How would the lack of government oversight stop Wal-Mart, for example, from establishing a massive monopoly that controlled the price of food for 90% of Americans? They've tried to do this before and it was only government intervention that stopped them."

I'd love to see a cite for this sort of claim. I get the feeling that "Walmart tried to establish a massive monopoly that controlled the price of food for 90% of Americans" is more fluff and fever-dream than fact.

Incidentally, the government potentially has the power to control not just the price of food for 100% of Americans (At least formally), but also 100% of their income (again, formally). The government, now a major investor in US auto corporations, is calling Toyota (a foreign competitor) on the carpet over their products. Many in government are, right now, trying to give insurance companies billions and billions of dollars in exchange for mandating that they provide health insurance to all Americans (with, shall we say, great legal encouragement on Americans to buy said insurance as part of the bargain). The government has thrown billions and billions of dollars at banks that are "too big to fail".

Could it be that part of the problem is that government is so large, so powerful, and in control of so much that this is itself the problem? Should we consider that maybe, just maybe, we rely on the government (at least the federal government) for far too much, imbuing it with authority, power, and "responsibilities" that make it a natural magnet for special interest groups, idiots with utopian visions, and yes, even corporations?

I suspect the answer is "Nah". Because the real issue isn't whether someone has far too much power over citizens, but whether they'll doing what we want. If it was suspected that corporations could potentially have undue influence over the government - but if they'd only do the /right things/ - I wonder if anyone here would be complaining.

Jim Jordan said...

We should fear both corporate power and government power. Both have a great tendency for evil, and no evil is lesser than the other. This is why both parties continuously fail. The Democrats are ignorant to the dangers of big government and the Republicans are blind to the dangers of powerful business interests.

Blaise Pascal said...

You make good points, Crude.

BP: "Because corporate leaders are unelected, and therefore cannot be voted out when citizens do not like what they are doing. "

They are elected by your dollars. If you dont like them, dont buy from them.

Victor Reppert said...

I didn't mean to say that corporate power is problematic only when they control the government. The reason control of government is dangerous is because it takes away the check and balance relationships between government and corporations.

Let's take the example of child labor laws. Would corporations refuse to exploit small children because it is unethical to do so? No, the government had to pass laws to prevent that. And we know that American-based corporations are perfectly willing to put factories in countries were there are no child labor laws and use the labor of children.

Conservatives proclaim that there should be more limited government. But when they get into office they NEVER decrease the size of government except when government gets in the way of corporate profits. So, for example, they will deregulate industries, but this is the kind of regulation that is often designed to make sure there is healthy competition.

The argument for capitalism as opposed to socialism is always that the pressures of competition will force business to adjust behavior in an ethical direction. That assumes that there is real competition. It also assumes that the companies in question can and will go belly-up if they don't do what the consumers want. Under those circumstances, consumers indeed can vote with their dollars. But it is very difficult for, for example, purchasers of garments, to know for sure whether or not a garment has been produced by slave labor in a foreign country, and people struggling to make it may feel they can't afford to make sure they are buying "fair trade." So some unethical conduct is more visible to consumers than others. And, with many industries, it isn't really clear that there isn't an implicit monopoly in place. I don't have a choice about what power company I buy power from where I live. And then we have the phenomenon of "too big to fail." If a company gets into the position of being too big to fail, then it is in a position to follow Lily Tomlin's maxim "We don't care. We don't have to." "Too big to fail" completely undermines the central argument for capitalism.

Mark said...

They are elected by your dollars. If you dont like them, dont buy from them.

You vote for military dictatorships by joining the army. If you don't like them, don't join the army!

Victor Reppert said...

"Less government" always sounds good until you start making the governmental reductions specific. "Cut government!!," people say. Then if we say "How about we close down that library by your house. It's costing money." "Well, I didn't mean THAT!"

Anonymous said...

"If you disagree that claim, do say so."

Believe I did.

My opinion is that in the absence of a government strong enough to regulate them, corporations would be freed to just exercise their power directly, without intermediary. I don't think any net power would be lost; I think there would in fact be a net gain.

Would you rather have a system in which financial institutions pay lobbyists to indirectly influence some banking policy, or a system in which all financial institutions combine to form a single conglomerate, which then directly sets all financial policy? I tend to think those financial institutions would be more powerful in the latter case.

Anonymous said...

Bob Prokop writing:

"They are elected by your dollars. If you dont like them, dont buy from them."

Not true at all. Corporate capitalism has in fact taken most of the fundamental decision making ability away from the citizenry. We may be able to choose what model car to drive, but the vast majority of us cannot choose to not buy a car, because our physical society is so structured as to demand one (distance of residences from places of employment, stores, etc.). By and large, we are cynically offered token freedoms that effect the peripheries of our lives, while all the major decisions have been made for us by unelected corporate persons.

Gregory said...

When there is less Government regulation of Business, then Business reigns without any restraint.

Less Government control does not solve the problem of "power" in a Capitalist society....it merely hands it over to Tycoon opportunists.

Here is how Government protects employees from the tyranny of Corporate profiteering:

1) By limiting the amount of hours a company can legally "force" you to work.

2) By prohibiting conditions that risk the safety and well-being of employees.

3) By eliminating employment discrimination based upon race, sex, creed, etc.

4) By preventing Corporations from swindling employees out of retirement benefits and/or severance packages.

5) By insuring that employees are paid a "fair wage".

6) By prohibiting monopolization of the "free market".

7) By holding Corporations responsible for producing safe and reliable products.

I could list more, but I think this should suffice.

No Government = The State of Nature = Anarchy

Justin Martyr said...

Do conservatives see the problem? Do they think it isn't a problem? Why not?

I'm not a libertarian but I can play one on the internet. The argument is pretty simple. Both sides agree that there is a toxic mix of government and corporate wealth. But progressives think that if we just make an every bigger overlap between the corporate sphere and government then suddenly corporate power will disappear. But if corporations are capable of capturing regulatory agencies already, then why wouldn't this make them even more powerful?

You can have a lot of fun googling regulatory capture and public choice theory. Even if you disagree (I don't - I see regulations as a necessary evil that should be used sparingly) it makes for interesting reading.

Justin Martyr said...

Let's take the example of child labor laws. Would corporations refuse to exploit small children because it is unethical to do so? No, the government had to pass laws to prevent that. And we know that American-based corporations are perfectly willing to put factories in countries were there are no child labor laws and use the labor of children.

I think child labor laws are different. There is a tragedy of the commons/arms race dynamic at work. Each individual worker benefits by having his children work. But this increases the supply of labor and thus decreases the price of labor. Workers would be best off acting as a cartel and agreeing not to use child labor, but each worker has an incentive to backslide. Child labor laws should thus be thought of as enforcing a cartel agreement than restraining the power of corporations.

It's not that different than labor unions. The only difference is that labor unions create a much more troubling insider/outsider dynamic. We consider it a good thing when children can't work, but it is a bad thing when blacks/east germans/immigrants and other sources of non-union labor can't work.

David said...

What is the list of Corporations that I am forced to spend money on by freewill and not government mandate?

Victor Reppert said...

I don't know what you mean by forced by free will. But again, let's go back to that whole scenario when we decided certain companies were too big to fail. When you say too big to fail, you essentially declare the bankruptcy of the basic philosophy of capitalism, or, perhaps, you are implicitly admitting that something caused a fundamental breakdown in the capitalist system. Why? Because it is essential to capitalist philosophy that companies that screw up go belly up. That's the whole reason for being a capitalist and not a socialist or a communist; the idea that the possibility of business failure creates a kind of accountability that is missing under socialism. If you want there to be real capitalism you have to fix the system to see to it that it doesn't happen again.

Corporate CEOs want all the benefits of capitalism, but they want to be protected from the capitalistic consequences of failing. I call that having your cake and eating it too.

Anonymous said...

Bob Prokop writing:

David, it depends on what you mean by "free will". Sure, if you want to willingly live a bronze age lifestyle, no one is holding you back. but other than infantile mind games like that, as long as you wish to remain a contributing and participating member os society, you are compelled to purchase from, and thereby support, a constellation of corporate entities. And when large behemoths such as chain drug stores drive out all "mom and pop" competition, than one has no choice in the matter of where to purchase medicine (other than the choice to go without, but let us agree to not be ridiculous in our discussion). Same thing with automobiles. There is no serious alternative to owning one in America (other than living in a cave), so we are forced to support the auto industry. I could go on and on, but our rational choices have largely been made for us by corporate power, at least for the really big ticket items.

Anonymous said...

Bob Prokop writing:

Sorry for all the typos in my last post. That's what I get for not proofreading!

David said...

Bob,

I was hoping for an actual list of corporations ("auto industry" is not a corporation). As for your examples, in my small town there are two mom and pop pharmacies and two corporate ones. The owner of one is the about the richest guy in town. The other one lives down the street--nice guy, I pay a little more to buy from him.

Seems to be plenty of competition and choices in the auto industry. Made in: US, Japan, Korea, England, Sweden, Italy, Germany...

So, I guess I don't get point of your examples.

Tim said...

"The argument for capitalism as opposed to socialism is always that the pressures of competition will force business to adjust behavior in an ethical direction."

You have a very distorted view of the argument for capitalism. It is not that competition will adjust businesses in the "ethical" direction, it is that it will adjust them in the "efficient" direction. Competition encourages businesses to cater to their consumers. Unfortunately, this sometimes results in unethical production habits - child labor, for example. It is in these areas where government intervention is necessary and justifiable.