Chad Perrin: SOB

14 January 2008

political postions on capitalism and corporatism

Filed under: Cognition,Liberty — apotheon @ 05:06

Democratic Party: Corporatism is bad, so capitalism is bad.

Republican Party: Capitalism is good, so corporatism is good.

Ethical libertarians: Free-market capitalism is good, so corporatism is bad.

Related Stances:

Mainstream anarcho-capitalism: Free-market capitalism is good, so government is bad. Corporatism is often assumed to be part of capitalism, and only bad under the aegis of government — which is odd, considering a corporation is specifically a result of governmental management of proprietary rights and economic liability.

Libertarian Party: Free-market capitalism is good, so . . . well. The end of that sentence is probably almost as numerous in its various possible forms as the members of the party.

Explanation:

In Western democracies, government has not been sufficiently divorced from the economic sphere to provide anything approaching a true free market capitalist economy, at least for the most part. The United States came close at one time, but it was not quite successful in that segregation as it should have been at even the best of times. As a result, the corporation as the default business entity in the US economy (and other Western democracies) was essentially unavoidable.

The term “corporation” is not just a synonym for “business”, even if the terms are in practice almost indistinguishable under the current conditions of Western economies (and a fair number of Eastern economies, for that matter) at this point in time. The reason they are so easily conflated is the simple fact that a corporation has something like a strong economic gravity well around it: the more economic power a corporation aggregates, the stronger its attraction to additional economic power. Such a set of conditions leads to corporations quickly dwarfing other business entities in economic power — which translates rapidly into political power at those levels.

This entire state of affairs, however, relies entirely upon the existence of a strong body of corporate law. Without governmental complicity in the creation of the corporation as a business entity, the corporation as a business entity would not exist. Such aggregations of power with ever-growing ability to absorb greater power would not exist as such. Instead, dominant business entities would come from a pool of sole proprietorships, collaborative enterprises, and cooperative endeavors, all of which would be limited in their ability to dominate markets and centralize aggregate power by the lack of the abstraction of the corporate power structure as a facilitator. The resources of these other business entities are inextricably tied to their respective individual owners, whereas those of a corporation are tied only to the power centralization of the very concept of a corporation, insulated from individual human involvement.

Because of the ubiquity of corporations as the dominant business entity under the current interventionist capitalistic economy we all know and “love” (to hate), people tend to find it significantly difficult to differentiate between “corporation” and “generic business entity”. A corporation is a form of business entity, but is not itself the only form of business entity — and in a truly free market economy (one where government does not attempt economic management), the corporation would not exist, by definition.

While a rigorous examination of libertarian ethics would ultimately either make clear the distinction between “corporation” and “business” or lead to a state of unresolved cognitive dissonance, the common illusionment that leads people to view “corporation” and “business” — or, more to the point, “corporatism” and “capitalism” — as synonymous tends to lead even mainstream Libertarian Party and anarcho-capitalists to believe the conclusions of such sloppy thinking. As a result, many self-proclaimed Libertarians (including anarcho-capitalists, who really should know better) are effectively corporatists.

Conclusion:

There is a right answer to this matter, if you believe that liberty and human rights are important (for any reasonable, self-consistent definition of these terms). It is, simply, that free markets are good — and because free markets are good, corporatism is bad.

All original content Copyright Chad Perrin: Distributed under the terms of the Open Works License