Sunday, May 08, 2005

Column on Corporations and Governments

Corporations and Governments

Tibor R. Machan

Many critics of free market capitalism focus their energies on
demonstrating that with corporations as powerful as they can become in a
free market, there is no danger as great as making it possible for them to
pursue profit freely, unregulated by government. They are convinced that
only a power that is even greater than wealthy big corporations can
contain the rapacious ambitions that are evident throughout corporate

The idea that big corporations are untamed beasts that wreak havoc upon
civilized society is immensely popular throughout the academy everywhere
in the world, including the United States of America. Most professors in
the humanities and social sciences, a great many writers, journalists,
artist, and entertainers?centered mainly in New York City and
Hollywood?cling firmly to their view that corporations are a threat to the
well being of nearly everyone in society and that those who do not share
this belief are deluded, period. It is not only Ralph Nader who embraces
this idea and the only reason Nader hasn?t reached national political
office is that he is viewed as a naïve idealist who wants to take on
forces that must be appeased, not fought.

It is pretty clear that in a society in which people may solicit
governments for favors, big corporations will have an advantage over
others, although universities and unions are not all that far behind in
the power they wield through lobbyists throughout the capitols of the
various states and the federal government. Champions of the free society
hold, of course, that the answer to this problem isn?t to abolish or try
to regulated big business but to refashion the legal system so as to ban
favors to any sector of society. They believe that corporations should be
independent of government as much as churches are. And their idea is not
implausible since by firmly separating church and state, the American
government has, in the main, remained independent of religious control.
If, for example, a massive Roman Catholic church, with millions and
millions of faithful, can be kept at bay, surely corporations could be as

Still, business corporations are probably always going to have a hold on
politicians in the legal system as currently composed. They control huge
sums of money that politicians want so as to run successful campaigns,
which isn?t the case with churches and universities. So long as election
campaigns need to be conducted and so long as people, including their
organizations, are, as they should be, free to make contributions to these
campaigns, it is difficult, critics of free market capitalism say, to
imagine a largely capitalist society free of undue big business-corporate
political influence.

Yet it is possible, slowly and over much time, to wean corporations from
government largess and vice versa. But this requires extensive education
and vigilant proselytization. The probability of such reform is small,
admittedly, but then so was the probability of abolishing slavery at one
time, or, later, segregation or the military draft. All changes of this
magnitude, that require undoing centuries of bad habits, both personal and
institutional, have a slim chance of succeeding. After all, corporations
are entrenched in the system itself, one that gives them such a bad
reputation, without many of them making a determined effort to end their

The question then becomes whether it is of any real use to seek remedy
for corporate influence from expanded government regulation, This is what
the current movie Enron: The Smartest Guys in the Room, along with most
statist critiques of the Enron fiasco suggest?namely, that the answer to
corporate malfeasance is more and more state intervention. But the logic
of such a position is seriously flawed.

After all, if corporations have powerful, albeit wrongheaded, influence
on government today, why would government have the ability to set them
right? That is a preposterous idea. Moreover, government intervention,
even apart from clearly often serving corporate interests, is so
susceptible to corruption, to misuse, that placing one?s hope in more and
more of it is flat out incredible.

The only hope is the slow, vigilant, process of divorcing corporate
commerce?as well as all other institutions susceptible to corruption?from
government. However much existing corporations exhibit the relentless
tendency to link up with government and thus wield much more than
harmless?and perhaps well deserved?economic power, it is plainly
unreasonable to expect that the alternative of increasing government
regulation is the right solution.

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