Monday, July 18, 2005

Corporate Immorality and Comparative Advantage

In his diary, "How to Create High-Paying Jobs and Slow Outsourcing bonddad implies that anyone who believes that corporations are "inherently evil" is not a member of the "reality based community." He calls such broad brush characterizations the language of socialists or communists.

To this I ask, how bout this guy:

"We must crush in its birth the aristocracy of our moneyed corporations, which dare already to bid defiance to the laws of our country."

Or how about this guy:

"I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country...corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed."

Or this guy referring to corporations in a speech:

"The first truth is that the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That is, in essence, fascism - ownership of government by an individual, by a group, or by any other controlling power. Among us today a concentration of private power without equal in history is growing."

So, who are these unrealistic, commie socialists? Thomas Jefferson, Abraham Lincoln, and Franklin Roosevelt respectively.

The dangers of corporate power

From the beginning of our republic, wise men have understood the danger of corporations. In fact, to a large degree, our country was birthed in revolt from corporate power, specifically, the India Trading Company and the Central Bank of London.

But time elapses and people forget their history and the forces of greed and corruption manifest, yet again, in the form of corporate oligarchy.

I have spent most of my adult life studying and writing about corporate power and I can tell you unequivocally, it is immoral. And liking, or even needing one of their products does not alter that fact.

Actually, the corporation, in its pure state, is not immoral, it is amoral. The corporate objective does not include the values of good or evil. It has only the cold, objective value of maximizing profits.

But human beings cannot truly be amoral. We are not passive entities. "To be" requires action in every instance. And action always affects something and someone else. "To be" a human being, we must always choose actions that do or do not cause harm. That are morally right or wrong. There's just no way around it.

But the corporate model ignores such moral considerations. Like an insect machine, it merely strives towards its objective, maximize profits.

You can see the amorality=immorality of corporate hegemony by the way corporate culture responds to one of its own trying to "do the right thing." Such extracurricular
considerations are almost always viewed as hostile to the prime directive.

Can generally "good" people participate in an inherently immoral system. Of course. But not without costs. Every year, 60 Minutes broadcast some report from a corporate whistle-blower who has finally reached an epiphany. They can no longer detach their own personal morality from their function in the amoral system.

Non-locality: Amorality's Evil Twin

And this leads to the heart of what is wrong with not only the corporate system, but all centralized, authoritarian systems including communists, socialists and even some democratic states: non-locality.

Non-locality is a physics term referring to action at a distance. Almost all the evils of men can be measured in their capacity to conduct action at a distance.

For example, poisoning the water supply of thousands of people right from your Wall St. office with a phone call. Or making the decision to destroy an entire city's economy over lunch.

In the most human terms, non-locality means never having to look the person who's child you gave leukemia in the eye. Or the old couple who's pension fund you evaporated. And that really sums up the evil of the modern, corporate world: the absence of accountability.

We have become so corporatized -- or institutionalized in the case of centralized, non-local state rule -- that we aren't even aware of our own detachment from our fellow man. This has never been more evident than in our health care system:

A woman in distress calls the doctors office complaining about chest pains and nausea and the first thing she hears the receptionist say is, "Do you have health insurance?" I did not make this up.

Was the receptionist evil? No, she was over institutionalized.

Quite simply, we have become inhuman. Our ever increasing interaction with the corporate system has left us dehumanized and disempowered.

Socialism: Non-locality's Other Evil Twin

Bonddad called blanket anti-corporatism language socialist or communists. I disagree.

Socialism, in almost all previous incarnations, is even worse action at a distance with no accountability. And that is what is evil: action without accountability, never having to look anyone in the eye, non-locality. At least corporations have some profit motive not to screw you over too blatantly. Centralized bureaucracies often do not.

Of course, I don't care for broad brushes much either. But exactly the same thing I abhor about the corporate model, non-democratic, centralized control without accountability, is a recurring them in both communists and socialists states.

It is indeed true that some systems function better centralized. These systems always involve few moving parts. Like the electric grid. And it is true that some action must take place at a distance. America is a big country. But the only way to ward off the inherent dangers of such systems is strong democratic oversight. Again, accountability.

Christian Conservatism Meets Corporate Amoralism

The great irony of the modern right-wing is the new alliance of the moral Christian conservative and the amoral corporate economic model. Corporate amorality, which again is immoral, has permeated our culture. The new faith of free market as Darwinian, social management has all but replaced our basest obligation to help and protect each other. And just as in the days of Christ, the followers have littered the alter with the icons of consumerism.

It is the altruism-is-evil sociopathy of Ayn Rand and Leo Strauss: any government action that is not limited to defense or the facilitation of commerce is socialism, that has infiltrated the Christian right. They parade their patriotism as faith while condemning the government of the people dictated by our constitution. One evangelical Christian argued to me that Christ, the miracle healer of the sick, would never have given free healthcare to the poor.

The Corporate Christian's Nemesis: Democracy

Under the American Constitution, Democracy is the medium through which human "good" is manifest. Democratic government is the sole mechanism by which we solve our collective problems, localize our plight and hold to account those agents we employ on our behalf. And we must fight to the death any system that rises up in spite of it.

Only through the strong superimposition of democratic will can we allow corporations to exist. For without it, the they will rise up like a vine weed and choke off the fruits of our collective good. We can already see the reach of that vine in every chamber of our government. Strangling the people's will.

It is not socialism to employ the agency of democracy to secure the interest of the commonwealth. It is what common people do.

Factors of Deportation

This brings me to David Ricardo and the theory of comparative advantage, another venture bonddad treated us to. Does it occur to bonddad that when Ricardo and Adam Smith were developing their trade theories, the primary form of communication was the letter? The primary form of transportation was a horse? Commercial transportation was limited to trains and boats?

What has changed? The non-localization of so called factors of production. Or the globalization thereof. Specialization localization is all but nonexistant now. We can move factors of production in a year. Robotic machination has also negated the theory of comparative advantage. Now, through the wonders of technology, anyone can hit the "On" button.

Is it not clear that this changes everything? Comparative advantage is an obsolete concept. The only "advantage" left is the limitations of labor rights and environmental regulation. Otherwise, we are all equal now.

Now, speaking of the reality based community, how about the simple fact that reality is no longer conforming to classical economic theories? Nothing Bill Clinton or Al Gore sold to the country has come true. We have at least a 600 billion dollar per year trade deficit. And this does not include the labor deficit.

Some day, historians will certainly view 21st century economists as crackpots practicing pseudoscience. Why wait?

Peer pressure and rigid academic discipline, not to mention Wall Street pressure, have compelled modern economists to close their eyes to the real condition of our economy. A condition that can only be described as savage.

Think outside the box. Go to the old part of your town and look at the architecture. Why can we no longer afford to create these structures? Why can we no longer afford to have excellent schools in excellent, inspiring buildings? Why do we not have state of the art infrastructure with high-speed rails and maintenance free roads. It appears we can't even afford to protect our children from the decimation of our air and water.

Why can't we even afford to have enough police to stop crime? All over the country, police don't even respond to anything less than a felony.

The United States is the richest country in the world in natural recourses. We have the cream of the crop. Water, energy, minerals, agriculture, even people. We should be, at this time in history, creating a super society.

Instead, we endure the fight-over-scraps economy. Like rats in the sewer, our local mayors, police, school boards, transportation boards are left fighting over scraps of funds from an economic system that is completely geared towards monied interests getting a bigger and bigger piece of the pie the commonwealth decays.

Ask yourself, what does it say about an economists who claims all is rosy while we have schools whose roofs leak, who can't afford books, who cant afford enough teachers? While the policies that have allowed the Central Banks and Corporations to accumulate 90% of the wealth in this country have left the rest of us fighting over scraps.

Bill Clinton assured Americans that we could compete in a global labor market with our higher skills and training. Aside from the fact that, as Bill Gates said, our schools don't produce high skilled laborers, even if they did, we still can't compete. How much higher skilled can we be than computer programmers? Where is the demand for Quantum Physicists?

One day, future historians will look back with absurdity that a country, a world so rich could allow so many to suffer and stagnate. That we had not the wherewithal to channel our resources to create a sustainable, prosperous civilization for everyone. Why can't we see that absurdity now? Is TV so good that we settle for scraps?

The essence of the American spirit is not to accept what is and endure it, but to see what can be and make it. I suggest we apply that principle to our economic views. We have more choices than the laissez fair capitalism and socialism duality. Perhaps it's time for Democratic Economics.

No comments:

Post a Comment