Reflections on Corporation Phobia


Some weeks ago the late Peter Finch appeared on the Tonight Show to plug Network, the Paddy Chayefsky movie in which he is one of the stars. In the discussion that ensued both Finch and Johnny Carson made extensive references to the awfulness of corporations. "They foster bickering," "People there are motivated by sheer greed," "The individual is simply lost in a world of corporations," and similar pearls of wisdom spattered over the microphone to 22 million Tonight Show watchers.

But surely, one might plead, who could take such trash seriously? No one watches the show for sociological insight. Probably not. Yet surrounding the entertainment features of Carson's variety fare is a world wherein the theme Finch echoed has become a veritable hit. With Ralph Nader never tiring of thinking up new schemes to denounce corporations, with politicians across the land rallying around the call for divestiture, and with decades of anti-business rhetoric reverberating throughout the globe, Finch and Carson merely make into cliches what may have become unselfconscious ideology for millions of others.

Well, but what's wrong with that? Surely corporations are very frequently the source of the worst kind of private and public shenanigans, with the worst of consequences striking at the essentials of many a person's private and public concerns. One need not detail the horrors perpetrated upon people by corporate interests—such names as Krupp, East India, Lockheed, are but a smattering of a sample.

Oh, but once again the story is clearly biased in favor of observing only the rottenness of life, in this case the seedier aspects of corporations. You can do this with virtually any social institution. Take marriage. Surely one would be hard put to provide data on the outstanding qualities of married life, not to mention giving examples of uniformly excellent marriages. Or sports, for that matter, or whatever else is covered by the news in our time. Unless one steps out of the government monopolized information-dissemination arena, one will not find but a couple of delightful things about anything in human existence. As one of my colleagues put it the other day, officially our world is committed to hating itself—at least its human elements. What with mankind no longer able to convince itself of possessing sparks of divinity, perhaps no one has thought of human greatness plain and simple.

Consider the corporation phobia. What could be wrong with people getting together to finance some venture that will be administered or managed by a group of experts hired for that purpose? Nothing. But in essence that is all that corporations are—voluntary groups united in the purpose of enhancing economic life via the production of some goods and services. The shareholders simply fund the venture, while the managers are paid to work hard for them. In the process, as it must be with any successful commercial endeavor, a lot of other people are getting what they desire for prices they are willing to pay. But this is just a very abstract side of the story. In particulars, what we get is voluntarily united effort, with the incredible results of technology, education, science, entertainment, art, travel and what have you as the benefit. The car that takes me to work and all other places, with its great little engine; the typewriter on which this editorial is being typed; the shirt I wear, the socks and the sweater; the glasses my friend bought yesterday; the books that I received in the mail today; etc., etc. All these are available because some people have chosen to build corporations that would pool resources and engage in productive, creative activities.

So what could be wrong? Why all the hatred, the nasty put-downs? What could be more benign than the legal arrangement which makes such incredibly beneficent human choices and activities possible?

To this the anti-corporate mentality will have a silent but potent answer: a similar arrangement in which human choices are well guided by compassionate, wise, altruistic, and completely powerful forces sitting in the political offices of the various societies throughout the world. Yes. The true underlying complaint against corporations is not that they have made mistakes, that they have often seduced governments for shady purposes, or that they are often interested only in profit. Most people are guilty of some of this! What really irks the anti-corporate activist is that he isn't managing this potent economic unit. Ralph Nader wants the power of corporations, as do all the critics. But they won't take the lifestyle that is often required, so a shortcut has to be devised. And this is government.

After all, government can be conceived of as an enterprise, a business run for profit. Sure it has to involve some oppression, repression, and slavery in the process, but what an efficient unit to have at one's control. When we no longer have to worry about people making choices as to what their energy will go to support, when we have it all in our own head and power to organize, our goals will flourish.

And what is more easy than to get support for this in a culture in which envy has been made part of the national psyche for the last century? The egalitarian mentality wants no one to be better off than another. Corporations can do very well, so-so, and quite badly, so there is plenty of egalitarian ground for objecting to them. If we made government the sole corporation, these unpleasant differences would vanish. Or so the fantastic story goes.

It is always difficult to defend an institution the participants of which have been guilty of so much evil as corporations have been. But here, as in other instances, the institution is not fundamentally at fault—apart from the questionable rule of limited liability for corporate negligence or intentional wrong-doing, it's a great idea. If it were defended as such, in its most excellent form, then nearly all the bad practices that go on under its name could be called just what they are badly run corporations, flops, failures, shady businesses. But by attacking corporations as if they were evil incarnate, the question of how to accomplish the good things corporations do is left open—but not for long. Yet the substitute, namely socialism, hardly holds out individuality, benevolence, peace, and other benign characteristics as a promise.

So what is to be done? In general—and under the circumstances that alone is open for comment—the idea of the corporation as a method by which free people can gather, bind themselves by legal contract, and venture for profit, needs to be given moral support! On the one hand, it needs to be stressed that forming corporations is a species of freedom of action and freedom of contract. As such it is a feature of a good legal order that no prohibitions against incorporations—no state permissions, no state limitations on size, no regulations of corporate activity, no imposition of "social responsibility" (other than full liability for its noncontractual actions)—be tolerated.

This is the basic point, but it needs to be combined with some data provided by the economists, namely that corporate economic activity serves the purpose of production better than the alternative of statism. The myth of inherently evil corporate activity, an adjunct to the plethora of dubious historical "knowledge," needs to be debunked good and hard. At the same time the crimes performed by certain corporations, the unfortunate state associations of earlier cartels, monopolies, and oligopolies must also be spelled out.

When such a case is presented on a wide enough scale, the anti-corporate mentality has no chance at rational argumentation. Even now the bulk of the anti-corporate rhetoric is hysterical, while the few measured voices of opposition have very bad economics to give them backing. With a clearly articulated, frequently voiced, and fair case for corporations, the attack will have less of an opportunity to settle into a status of favored cliches on the Tonight Show and elsewhere.