0071 The Flaw of Corporatism is the Flaw of Statism MP3
(audio player below article)
The Flaw of Corporatism is the Flaw of Statism
by Ben Stone
The State is easy to pick on. It stomps around hurting and killing people, robbing at will, while spreading the most vile and unfounded lies imaginable. Any good person who has a true encounter with the raw evil of the State can quickly see its retched and hideous nature and will be repulsed by it. Even when the State hides behind the guise of “limited government” every now and then we see the talons and the fangs waiting to emerge at the first opportunity. But the puppets of the State, governments included, are more difficult to discredit because they tend to appear useful or even necessary. This is the case for each puppet of the State, be it governments, the media, the military, the banks, or the most powerful of them all, the corporations. At first glance, corporations seem to be the source of many good things. They engage in manufacturing and trade, they provide jobs and steady incomes, they develop products that improve the lives of millions. So how can anyone equate corporations with the evils of the State?
The obvious answer to that question is that without the aggression of the State there would be no corporations. The corporations exist due to the fist of the State and the force it employs on the market. If I can prove this statement it should be intuitive that anything that exists through the use of aggressive force is unethical and cannot produce a net-good in society. That is not to say that evil cannot do good on a limited scale or in limited circumstances, just that the net production of evil will always be more evil than any good that may occur. So for example, a highwayman may rob the passengers of a coach and then spend his ill gotten gain at the local pub. If you ask the bartender, who has no idea where the highwayman got his money, he may think this customer is a great guy. If you only look through the bartender’s eyes then you only see that the bartender can now better afford to educate his children. If you only look through the barmaid’s eyes, you only see the extra tips that help put food on her table. If you limit your vision to one side of the equation then you could assume the highwayman is a force for good. Corporations spend billions of dollars to keep us all looking through the bartender’s eyes while they use the force of the State to rob the market of its wealth and productivity. But the real point that must be seen, as I attempt to prove my allegations, is that corporations are a product of the State and not a product of the market.
Although investment schemes existed throughout history, the modern corporation came to life on December 31st, 1600, when Elizabeth Tudor, daughter of Henry Tudor and Ann Boleyn, signed the charter for the East India Trading Company. How you judge the British East India Company depends largely whether you see it through the eyes of the British bartender as he counts the mugs of ale being consumed, or through the eyes of a Dutch sailor as he watches his ship being shredded by English cannon fire. The truth of the matter is that, at this infant stage, the corporation was relatively harmless. But then again, the theologian will tell us that Satan himself was once harmless and then became evil. By September 16th, 1773, rather than being forced to purchase and pay taxes on the monopoly products of the British East India Company, American colonists stormed corporate owned ships in the Boston harbor and tossed the cargo of tea into the water, defying the corporation and the force of the Crown behind it.
Some have condemned the colonists as terrorists for attacking corporate interests and destroying private property, but there’s a problem in this way of thinking. Under natural law property rights only individual people can rightfully own property. The corporation was not an individual person. The corporation was simply an agreement between a group of investors and the State. And since the colonists were not party to the agreement, they were under no obligation to recognize the agreement or the property claims of the corporation. During the 1800’s governments grew closer and closer to corporations until the marriage was consummated and the two became mutually dependent. In the US this happened at or about the time the Supreme Court chose to view corporations as people in the 1886 ‘Santa Clara v. Southern Pacific Railroad’ case. The corporation was a fictitious entity existing only in the mind of people, but suddenly it had the rights of an actual person in the eyes of the so-called law. Further court decisions and acts of various governments have supported and extended this mythology until the bulk of the present generation believes it with unwavering faith.
Once we understand that the corporation is a State authorized entity, solemnly married by contract to government for the purpose of controlling the market, with the legal standing of an actual person, yet without the legal liability of a person, it shouldn’t be difficult to begin to smell something foul about this creature. But having seen that the State first authorized the creation of the corporation, how do we know that the corporation is not the product of the market in spite of the State? Viewing any market where the State is not in control and asking if a company could ever naturally evolve into a self-supported entity, not owned any one person, immune from liability for its actions, can test that theory easy enough. So for example, with the protection of the State, a corporation buried 21,000 tons of toxic waste and then sold it to a school district for $1. The school district then hired other corporations who knowingly constructed schools and low/middle income housing on the toxic dump. This happened at a place called Love Canal in Niagara County New York. After 20 years it was discovered that the residents of Love Canal were suffering horrendous rates of birth defects and all manner of health issues. The US president Jimmy Carter, along with the US congress, stepped in and began pouring vast amounts of tax money on the problem. A couple of the corporations were fined or sued but for the most part those corporations emerged intact, while the US taxpayers absorbed the bulk of the liability. So the question would be, could a group of corporations do this without the protection of the State and come out the other side still doing business?
Keep in mind; the case of Love Canal is not a one-off isolated occurrence. GE legally dumped over 100,000 tons of toxic waste into the Hudson River and the US tax payers are once again left holding the tab. That’s not to mention that just in the year 2000 alone, GE legally pumped 4.4 million ponds of toxic waste into the air. But GE is not even the worst corporate polluter in the US. It ranks below the United States Government, the Honeywell corporation, and the Chevron corporation, who actually give some credence to the silly notion that GE is a “green” company.
So then, would any of these corporations exist if not for the limited liability laws that give them unfair market advantages and protection from the repercussions of their actions?
I can’t imagine anyone even attempting to make that argument.
We see then, that the State created the corporation and the corporation continues to function because the State protects it from the correcting forces of the market. It’s not hard to see that, having this kind of advantage over legitimate businesses, the existence of the corporation distorts the market to the proportion that it engages in the market. But having established these facts, what is this flaw of corporatism that is also the flaw of Statism?
Always remember this one truth. People act. Governments don’t act. Corporations don’t act. The media doesn’t act. The military doesn’t act. Banks can’t act. Even the State itself can’t act. People act. And even though people may act on behalf of any of these entities, ultimately most people act for their own benefit. Their actions are not always successful in benefiting the actor, but people still act primarily for their own benefit.
An example of this truth can be observed in any day-to-day setting of any of the offices of any of the entities listed above. Observe the work habits of any given set of employees of any corporation. How many of these employees will exhibit the kind of work ethic and dedication that’s common in single owner/operated businesses? You’ll always find some outstanding individuals who go above and beyond the minimum expectations, but generally speaking its not because of a devotion to the corporation so much as a desire to succeed for their own benefit mixed with self motivated work ethics unique to that individual. Further, in a privately owned business it’s in the interest of the business owner to recognize and reward the outstanding individual performer. Keeping, developing, and promoting these people is one key to making a small business a success. However in the corporate world, individual performers are often seen as a threat to the office status quo. Coworkers, knowing this person could cause the boss to expect more work from everyone, will single out the over-achiever and look for ways to slow them down or even discredit them. Inept bosses will avoid promoting the over-achiever for fear of having to compete with them on a peer level. The inept bosses will naturally look for someone slightly more inept than themselves for promotion. This is an infectious cycle that drives the mediocre and inept to the leadership of corporations.
Additionally, have you ever considered the thought process of a corporation? A team or a committee decides upon almost every action after washing it though waves and waves of company politics. Before that process finalizes, each new idea must be refined to the point that it’s acceptable to a variety of groups such as a design team, a legal team, a publicity team, and more. And the whole time, if the idea is a flop, there is rarely a single individual that feels the whole sting of failure. Individual employees may own small amounts of stock, but since there is no true ownership in the corporation there is no sense of property. Compare that to how the private businessman thinks. The business is his property and if he has a family, the business is his legacy to pass on. It’s his money and his labor tied up and if he decides to risk his business on a new idea, he will have every incentive to make sure that idea will work.
The result of the lack of true property ownership in a corporation, along with the lack of responsibility for individual actions, is a big stupid corporation dependent on small subcontractors for all the heavy lifting and government bailouts, favoritism, and contracts as the only real source of profit.
Here we see the common strings that tie the Puppet Master to the puppets. The State itself is a big dumb lumbering inefficient relic that was outdated before it was even finished developing. It’s supported by theft and aggression, while lacking any of the aspects of property ownership on the individual level. All of its decisions are made in committee utilizing compromise and the path of least resistance, rather than hard work and dedication to success.
Therefore the State cannot compete with individual accomplishment over the long run. As the State falters and fails it will fall back on its most powerful tool, the corporation. But that institution is founded of the same unstable subsurface as the State and will crumble as the State leans on it. The whole cathedral of cards will fall to the floor as soon as people realize that their best interest is served by not acting to support the State.