November 26, 2010

The Vice of Corporations and the Virtue of Markets

Corporations, as we've seen previously, have been the focus of repeated scorn and criticism, justifiably so since they can be deemed responsible for a great many ills in the world. Being able to hold them accountable for their actions, often real crimes, has been easier said than done -- often, not done at all. I promised in my last post to offer a strategy to attack corporations at once -- rather than one by one.

I've discussed it before, but here it is again, put briefly: Attack markets. To describe it again with more words, it is to replace the economic institution of markets with another, better, economic allocation institution. How exactly that's to be done and what to replace them with are bigger questions which I'll tackle reserve for future posts. But in this post, I'll elaborate on the reasons why markets should be targeted and replaced.

While corporations are widely reviled as evil, markets are perhaps just as widely (and ironically) regarded as good. They supposedly serve as neutral and reasoned arbiters, where buyers and sellers can vote through their dollars in a mechanism deemed far more efficient than any kind of command-planning economy (like corporations, but I'm getting ahead of myself here). It is certainly part and parcel with the functioning of the major media in the United States. Even in left and progressive activist circles posit variations of markets under such rubrics as solidarity economics or market anarchism. And non-profits and liberal activists -- including many I've worked with on various media-themed efforts -- tout competition as a positive value.

So, markets are good, corporations are bad. And yet, markets a big reason why corporations exist and thrive. The two, I would contend, are intimately connected. To explain:

1. Markets are a competitive realm.
2. Competitive realms are ones in which participants either win or lose -- there's seldom no middle ground, and survival is the name of the game.
3. In a competitive realm, you're at an advantage to be or behave like a monster to improve your chances to win, since being nice is antithetical to survival.
4. Corporations are the political economic equivalent of monsters, as the book/movie The Corporation has discussed.

The result: Corporations are the "selected for" entities since their monster-like behavior best ensures their chances for survival.

One expected consequence (among many) from this relationship between markets and corporations is that, over time, competition reduces the number of competitors through attrition or buyout or both. (Any season in any sport is attrition; 30 teams play in the NHL, but only one team hoists the Stanley Cup in June.) It's rational in a market to become a monster or become part of a monster.

Another expected consequence is that corporations are internally dictatorial. If you're constantly behaving like a jerk in outside relations, what makes you think it's rational to be nice on the inside?

This answers the question hinted at by the title of this blog post: If corporations are subject to such scorn, and corporations are direct spawn of markets, why aren't markets held to such similar scorn? Because, I would suggest, the same corporations that survive and thrive from markets are also the same corporations that command the lion share of media and widespread awareness of issues.

That's my proposed strategy: Take on corporations by taking on markets. What are some possible tactics for something far easier said than done? That's a matter I'll start to tackle in future blog posts."