Friday, June 3, 2011

The Liberal Love/Hate Relationship with Corporations

Liberalism has a strange relationship with corporations. The earliest incarnations of liberalism predate corporations, though classical liberalism is such that it endorses free markets and industry. It might be safe to assume that classical liberals would support the concept of corporations, though I’ll come back to the possibility of why they may not later.

The liberalism of the American forefathers was not particularly friendly to industry. They favored agrarian economic models, seeing the source of wealth being the production of raw materials, not the production of finished goods. The government closely regulated corporate charters and limited the creation of corporations.

This view shifted with time, as a natural function of Northern industry far out-pacing Southern agriculture in terms of wealth creation. Corporations lend themselves to large-scale production, and it is arguable that rail would have been impossible without either corporations or government undertaking the project.

Liberalism shifted towards favoring industry in the 19th century in America, and government recognition and protection of corporations began slowly at first, but snowballed quickly out of control. Liberalism began to once again shift against corporations when Republicans began legislating against monopolies and trusts, as with the signing of the Sherman Act in 1890.

Still, mergers had become all the rage in the business world, and the trend of consolidation continued into the 20th century. While I have a clear picture of how Liberalism swayed up to this point, I’m sort of in the dark regarding the 20th century.

In most respects, it’s hard to analyze what Liberalism was doing in the 20th century in general. It’s largely a lost century for liberals in America, because it’s hard to point to what was liberal and was wasn’t, who was liberal and who wasn’t, what polices were liberal and which weren’t.

There is certainly some confusion based on the fact that many liberals held conflicted views, supporting some corporations and not others. Not many people were calling for Xerox or IBM to be shut down, but people who support those companies might have a problem with oil companies or cigarette manufacturers.

It’s safe to say liberals took a largely pick-and-choose stance when it came to demonizing corporations, and liberal politicians have protected corporate interests on many occasions (and I’m sure the corporate donations they received had nothing to do with it…). The whole century is a little muddled regarding corporations, perhaps because a huge gap between liberal voters and liberal politicians opened on this very issue.

Most liberals I know have a sort of intangible dislike for corporations, though I question how much they really hate them. Do you really hate corporations if you Tweeted that sentiment on your iPad while driving your Prius to Starbucks?

Personally, I don’t think it’s very wise to demonize corporations as a whole. Instead of trying to erroneously prove that all corporations are inherently “evil,” it would be better to fight abusive corporations and practices, and we can generally all agree these do exist, and leave other companies alone to do business.

Some of my favorite things come from corporations. There’s a comfort in this big world in knowing if I go to a chain in another state, I can get something familiar that I know I’ll like. It’s nice to try new things when you’re someplace new, but sometimes the stress of travel is enough to make you crave food you know.

And while I don’t drink coffee or go to Starbucks, nor do I own an iAnything, I have plenty of brand name stuff that I do enjoy. I’m writing this on a Dell computer while sitting in a La-Z-boy recliner in an Eddie Bauer shirt and Tar Heel blue Nike basketball shorts while my LG flat screen TV plays Adult Swim cartoons (American Dad at the moment). Some or most of these are bound to be corporations (or associated with them), but I don’t care enough to see, because it’s not important.

Even oil companies are not something I oppose as a matter of principle. No, I see no point in opposing oil companies, just the bad things they do. We still need oil, I just support the notion of getting it as safely as we can, and I don’t like the favorable treatment oil companies get from the government. Oil companies can exist without government corruption, and they can take responsibility for the damage they do to the environment. This shouldn’t be difficult, either, we just have to make a few changes.

For one thing, we can’t classify bribery as “free speech,” as the Supreme Court did recently when it ruled that corporate donations to politicians are protected free speech. There also need to be more restrictions on the activities of government workers after they leave public service, because far too many deregulate industries to make them more lucrative, and then retire to cushy jobs in those industries.

Earlier, I mentioned that classical liberals may be said to be pro-corporation, but there is actually some debate on the matter. While there is no doubt classical liberals support the free market, there is some reason to believe corporations are not within the working model of the free market. From government protections to the separation of ownership and management, corporations break many of the basic rules set out by classical liberals like Adam Smith.

Personally, I think economics has progressed far beyond Smith, so I don’t put much credence in his opinion (especially since we cannot know with complete certainty how he explicitly felt on the matter). I see corporations as an advancement, like a technology. To abandon or outlaw the corporation is, in my view, a radical step backwards.

I anticipate that if corporations were somehow abolished, they would be reinvented, perhaps under a new name, and that all the same mistakes will be repeated unless they are directly addressed. It would be best to take what we have now and work to fix the problems that have arisen.

In closing, I ask anyone who opposes corporations entirely, and believes they should somehow be done away with, what you would do? Should the government take over ownership of all corporations? Should they be broken up into smaller companies? I know there is hostility out there, but I rarely see a workable solution to the “problem,” or even a clearly defined problem. Corporation haters, enlighten me.

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