Over at TLF, Tim Lee is raising all the right issues in his (incidental) discussion of the reasons why Libertarians have trusted big corporations more than big government. That’s something of an understatement–Libertarians have generally suspected big government of the worst possible things, while bending over backwards to make excuses for corporations when they do something that trespasses individual freedoms.
Amartya Sen in Development as Freedom noted that Libertarians have a habit of making certain informational exclusions, seeing the importance of procedural freedoms (freedom of the press, for example), and ignoring the lack of substantive freedoms (freedom from involuntary starvation, for example). I see the same pattern in Tim’s post–the issues he raises are right, but there’s information missing. My goal in this post is to supply the missing information, so you can judge for yourself whether corporations pose the risk I think they do. To be clear, I am no fan of big government, but am concerned right now with the freedoms that are being destroyed by corporations. Sometimes government and corporations are acting in concert, against individual freedoms, but it’s almost always clear who’s in the driver’s seat when that’s happening. So at a certain point, the choice of big government or big corporations is just a tactical decision of those who would oppress.
So, Tim says in his post:
During the 20th Century, policy debates often centered on power struggles between governments and corporations. The capital-intensive nature of a lot of industries meant that in many cases, policies that reduced government power often meant that corporations had a large influence over peoples’ lives. As libertarians, we pointed out the advantages of this arrangement: first and foremost, you have a choice about which businesses to patronize, but no choice about whether to deal with the government….. And of course, the government is a couple of orders of magnitude bigger than the largest corporations, so even if raw “bigness” is your only concern, concentrations of government power should concern you a lot more than concentrations of corporate power.
I think that accurately describes the Libertarian mindset of the 20th century. But is Tim really right about government being bigger than corporations? In the strictest sense, yes, in that no corporation comes close to the size of the American government, easily the world’s largest. But, in general, there are corporations whose gross income surpasses a great many countries, even very large countries:
“Of the 100 largest economies in the world, 51 are corporations; only 49 are countries. Wal-Mart–the number 12 corporation–is bigger than 161 countries, including Israel, Poland and Greece. Mitsubishi is larger than the fourth most populous nation on earth: Indonesia. General Motors is bigger than Denmark. Ford is bigger than South Africa. Toyota is bigger than Norway.”
So some corporations are bigger than governments, and it’s also fair to say that some corporations are bigger than most governments. Even more significant though, is that corporate power is increasing while national government power is on the wane. An excellent book that describes the process whereby economic regions are becoming more powerful as nations are becoming less so is Allen Scott’s Regions and the World Economy, (Oxford University Press, 1998). So as corporations are gaining power the national sovereign state is losing power, with power devolving to economic regions, which are even less able to counterbalance corporate power aggregations than national governments are.
Globalisation has given corporations a virtually unlimited domain of action; they can operate globally while governments are normally limited in their jurisdiction by national boundaries. If a corporation doesn’t like the environmental, or labor rules is country A they just pick up and go to Country B.
The line between large corporations and large governments is becoming increasingly blurry, with governments basically seeing their duty to align themselves as closely as possible with the goals of the corporations, against the interests of their own people. A prime example of this would be present day China, and therefore it is no surprise that the IP Central crowd fawn over China, and heap criticism on India. But our own country is becoming more and more like China every day: a state run for corporations, not for people. That’s also seen with the passage of freedom restricting laws like the DMCA, which was passed at the request of the RIAA and the MPAA, even though it was never popular.
Why are libertarians almost totally incapable of finding fault with the actions of any corporation, however bad or freedom depriving that action is? This is especially troubling because libertarians say they value individual freedom, yet much of what is done by large corporations destroys that individual and his freedom.
I had asked that question some time ago, and found a very convincing answer in the wonderful book Development as Freedom by Amartya Sen, in his description of the “informational exclusions” made by libertarians. Basically they want so very much to believe that the simple extension of procedural freedoms will solve all the big problems, that they are unable to process information which contradicts this. Such information does not exist, can not exist, and is of necessity excluded.