Thursday, August 12, 2010

Comes the Dawn

A recent survey by the Chamber of Commerce showed that whereas 57% of Americans “support capitalism”, 70% “back free enterprise and free markets”. And, as usual, I'm intrigued by that mysterious 13% -- i.e. the people who are pro-free enterprise but against capitalism. Are they confused, or do they know something that other people don't? Now, granted that the 30% who like neither capitalism nor free enterprise are, undoubtedly, hard-core liberals... and those who like both are, in all probability, standard-model conservatives... again, who is in that 13% group?

But first, let's look at a quote from a Chamber of Commerce executive concerning the overall results: “We need to do a better job of explaining the economic system in the United States and how it is working.” He believes that there is “a misunderstanding of the capitalism.” Well... frankly, I think the American people at this point know a whole lot more about the economic system than they would care to... and as to “how it is working”, I think the answer for most people at this point would be “not!”

No, there's not a “misunderstanding of capitalism”; if anything, there is an increased understanding – and part of that understanding is that “capitalism” as practiced today, especially by the major corporations and financial conglomerates, has very little to do with “free enterprise” or “free markets”. Those qualities may still be apt descriptors of small and even medium-sized businesses... you know, the ones that actually provide goods and services that people understand and are willing to buy on the free market... and on a competitive basis, by the way. But I have yet to perceive what all those “investment banks” and other Wall Street outfits that exist just to churn money around have ever done for the ordinary American citizen – on the plus side, that is. How can they claim to be responding to “market forces” if no one understands what they do? So no, “misunderstanding” has nothing to do with it; if anything, the American public understands more about so-called capitalism than it ever has – and it doesn't like what it sees.

Of course, the few major corporations that are still concerned with their public image like to claim that, shucks, they're just like any other business... like the candy store on the corner, for example... but writ large. And that brings up an interesting question (aside from the blatant snow job that hopefully, few if any people will fall for), namely: Is there something about “big business” -- some emergent quality – that inevitably makes it turn away from good and start doing evil? Or is that just, let's say, the most “natural” course, given the fallibility of the people involved, but not at all inevitable? I mean, think about it – most of what we call “big businesses” started small. Look at Wal-Mart, for example. Or Microsoft. And yet, sooner or later, most of these gigantic multinational firms acquire the “evil” designation – as witness Wal-Mart, Microsoft, Apple, Starbucks... you know what I mean. There is always someone out there who is willing to pronounce one or more of these outfits “pure evil” -- and yet were they always so, but not large enough to do any serious damage, at least at the beginning?

One thing is for certain in our time: The larger any firm becomes, the more of its time, energy, and resources are spent on self-preservation to the detriment of plain old “customer service”. And this, in turn, is at least partly because, at the upper reaches, the competition is more keen, more fierce, and unrelenting; when you're talking about multi-billion-dollar contracts, for example, there's not much a business won't do to get to the head of the line and stay there. Another factor is that the sheer size of an organization tends to depersonalize its relations with its employees, who start to feel more and more like cogs in a machine. I don't believe, for example, that working conditions at the Postal Service are that much worse than they are anywhere else; from what I can observe they're actually better. And yet the term “going postal” has entered the language to represent an employee who goes berserk and starts spraying bullets in all directions. I think it's the sheer size of the organization, and the things that naturally occur because of that sheer size, that's largely at fault. (Still another argument for distributism, by the way.)

And of course there are many other things a large business has to do in order to stay that way – and these are based as much on the general moral corruption of society, especially as reflected by the government, as on any pre-existing “evil intent” on the part of top managers. Take, for example, the lucrative field of government contracting, which is characterized, at the top of the heap, by things like “no-bid contracts”, government-supported (or mandated, by law or regulation) monopolies, and ample opportunities for waste, fraud, and bribery. One would have to be a moral giant with nerves of steel to resist all of these temptations... and, sure enough, hardly anyone does. (And the few who do stay “small”, I would say. In fact, they probably go out of business before they get anywhere near "big".)

And there's another factor as well. Corporate CEOs these days are not like the innovators and owners of old; their interest in the business is strictly monetary, and has no emotional component. In other words, “loyalty” simply doesn't exist in those circles... which is why CEOs and other top officers behave more like mercenaries, raiders, or pirates than leaders who have an interest in the company's success (and reputation). How many times have we heard about a top executive bailing out, and soon afterwards the company goes bankrupt (or needs a “bailout” by the taxpayers)? There is no morality out there – only the seeking of short-term gains. “It takes a pillage”, you might say. And yet this situation surprises no one, and is considered perfectly acceptable – just the way things work. But I daresay the “robber barons” of old would be appalled. They at least had loyalty to the companies they founded – not just to themselves and their “portfolio”. But, with very few exceptions, corporate CEOs these days are hirelings – war lords, brought on board to make profits through any means necessary, or, failing that, to at least extract a fine reward for themselves and their cronies... then to move on to the next conquest.

Now, I'm not going to claim that all of these problems can be solved by enforcing smallness. Anti-monopoly legislation and regulation, while seemingly well-intended, has lent itself to shocking abuses over the years (plus, it's administered by bureaucrats, which is never a good thing). And admittedly, if one believes in free and open competition, one also has to admit that there are “economies of scale” -- that bigger companies can often provide the same goods and services for less. (See Wal-Mart again.) So it's a conflict. I don't think anyone out there, except for the most extreme distributist, wants to see an entire society full of nothing but corner candy stores (figuratively speaking). Can the small-town “Main Street” really be extrapolated to the entire country? I tend to doubt it. But, on the other hand, does every small town need to be put out of business by the Wal-Mart out on the bypass? Once the death star called “Wal-Mart” rolls in, you can forget about “Main Street” and small-town quaintness, friendliness, and personal service; from here on out it's a bunch of morons who no one knows, working for some rich guy eight or ten states away. The old-time Sears catalogs were more warm and fuzzy than the average Wal-Mart. And yet, it is, arguably, the result of millions and billions of free “supply and demand” choices by consumers. If “Main Street” was so great, why did we stop shopping there? “Oh, you know, price, selection, and so on. And there's a bank right in the store! And a fast-food place! And a hairdresser!” Et cetera. I've heard it a hundred times, and so have you. So OK, people got what they wanted (as expressed by their “consumer choices”)... Main Street disappeared... and Wal-Mart became Evil Incarnate. The mystery is that anyone wonders why.

A similar scenario could be told about Microsoft, Apple, Starbucks... with the added caveat that any “high-tech” firm owes a good portion of its existence and prosperity to government contracts. And that brings us back to why and how firms become evil – the implication being, if you're not willing to be evil, you can only get so far -- especially if you depend on the government for a good portion of your business. But then look at Google – very “high tech”, and yet its informal motto is “Don't be evil”. And as far as I know, they're managing to stick to it, more or less... i.e. they are not the blatant predators outfits like Microsoft are, for example. So there is a choice to be made, and nothing is inevitable – and yet the political and economic structure of our society does, in fact, constitute a moral hazard, in much the same way as the hyper-bloated government budget does. When confronted with so much money and potential power, there are very few strong enough to resist – and those who have fallen form their own society which, in turn, enforces the “rules” by which one gains admittance. And when they have the gall to identify what they are doing as “capitalism”, well... some people fall for it, and some don't. And it's those latter who should, by rights, form the core of a renewed society – one in which free enterprise and free markets thrive, but “capitalism” has been slain like the ravening beast that it is.

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