I’ve said it before, and I’ll say it again, “Corporations are like a chainsaw. They’re a powerful tool, but if you don’t control them, they’ll rip your leg off.” Most of the articles on this site spend their time ripping corporations — but only because they’ve gotten out of control. This article redresses the balance somewhat, and tells what’s good about corporations.
Originally published 2005
Powerful Engines of Progress
Let’s say you’re a cabinet maker. Your livelihood depends on making cabinets. You simply can’t afford to take the time to create a better nail, or a better hammer, or most any other kind of took that would make it easier and more efficient to create cabinets.
Enter Capitalism. Now, you can make money by inventing a better hammer, and selling it to every cabinet maker in the business. They willingly spend a little money to improve their efficiency and the quality of their results. The accumulated income from all their payments lets you make much more than you would have made as a cabinet-maker’s assistant.
Of course, it takes money to build such a company. The initial prototype needs to be developed in a finished product. You’ll also need money to set up a manufacturing processes, so you can deliver to prospective customers.
The hammer needs to be advertised, and then sold — directly to cabinet makers at “carpentry fairs”, then maybe shop-to-shop, and eventually to stores. Maybe even to homeowners. All of that takes marketing expertise, research, and the ability to evaluate the results of trial efforts, to pick a long-term approach.
And of course, you’ll need an organization. You’ll need managers and accountants and secretaries and all manner of people who provide services needed by the other parts of the organization. That was the initial genius of capitalism as an engine of progress.
As companies grew into corporations, and then into larger conglomerates, they discovered the benefits of the economy of scale, of vertical integration, and in standardized parts (for example, standardized threads, so a given nut always fits on a given bolt). Each adoption made further advances possible.
As the population grew, it began to become possible to garner a major windfall from a better hammer. You didn’t just make what you could as a Master Cabinet Maker, you set yourself up for life. Investors benefit from the arrangement as well, so venture capital outfits were formed — organizations who went looking for a good idea to invest in.
Their efforts further accelerated the rate of humanity’s progress. Producing the technological marvel that is our current civilization.
In the process, of course, we may well destroy the environment we need to live in. But that is mostly beside the point. But as the day of potential disaster draws nearer, great ideas in the form of green energy systems and water production systems are finding backers, and a ready market. So Capitalism may well solve those problems, in the end.
I maintain that a government which was exercising sufficient foresight could have hastened the day, rather than allowing it be postponed to the point that it might well be too late. For example, they could have slowly taxed oil and gasoline at an increasing rate, thereby creating a much stronger incentives for green energy, much earlier. But that, too, is beside the point. (It just had to be said.)
Antidote for Nationalism
There’s nothing particularly wrong about feeling good about your country — except when you start thinking that other countries are bad, and you go to war because of it.
The nice thing about international trade is that trading partners don’t like to go to war with one another. Weapons manufacturers do well, of course. But most every one else loses. So corporations tend to be against war which, on the whole, has been a good thing for humanity.
For most of the past 30 years, I’ve been a big fan of global international corporations, for just that reason. They do lessen significantly the likelihood of war. I’ve only changed my mind because, in my view, the world is now hovering on the brink of a global economic feudalism that will be managed by giant, multi-national corporations. The process may take 30 or 40 years, but pending resource scarcities, continually lowering standards of living, and increasing concentrations of wealth suggest that the process may well be inevitable, unless we take concerted action, right now.
Antidote for Religious Fanaticism
An even more pernicious force than nationalism is religious orthodoxy. (The precise term is actually, catholicism, which means, “My way is the only right way”. But I hesitate to use it, for fear of being perceived as singling one group, even if they were responsible for the origin of the term.)
The problem with religious fanatics is that they have no humility whatsoever. They absolutely know they are right. If you disagree, you are wrong. It’s as simple as that. If that’s as far as it went, it wouldn’t be too bad. But real fanatics know that punishing you or preventing you from your sins is good for you, so they don’t hesitate for a second to do whatever they need to do to purify your soul. Hence the Crusades, the Inquisition, and various forms of ethnic cleansing.
As long as “the rule of law” is the governing principle in the land, religious fervor is held in check. But when religious zealots gain access to the power of government, watch out. Religious persecution in various forms are sure to result.
America’s founding fathers were wise enough to foresee this danger and enshrine the principle of “Separation of Church and State” in the Constitution. Unfortunately, there was no way for them to see the rise of an industrial civilization and global multinational corporations that would effectively wrest control of the nation’s democracy from it’s people so, sadly, they neglected to establish the principle of “Separation of Corporations and State”.
One good effect corporations have had, however, has been to curtail religious fanaticism. To a corporation, one person’s money is as good as another, and your religious beliefs are irrelevant. So they tend to avoid irrational discrimination.
Discrimination is a good thing. Irrational discrimination, on the other hand, is just idiotic. For example, it’s irrational to discriminate based on the color of a person’s skin. Their speech patterns, on the other hand, tend to indicate a person’s background and suggest the kind of values they hold. So discrimination based on speech patterns could well be rational — for example, if you were looking to hire a lawyer. On the other hand, refusing to sell food to someone based on their speech patterns would generally be idiotic and irrational — while refusing to sell guns based on those patterns might well be wise.
Too, if you happen to engage in practices that aren’t hurting others, businesses will find a way to sell you the things you need for that practice, whatever it may happen to be. So businesses have a secularizing effect, in that they support and even advertise practices that some religious groups may find abhorrent.
Of course, there is a balance to walk here. That’s where government plays a role. “Religious” practices that hurt others, animals, or the environment can’t be condoned, regardless of how sincere their practitioners believe themselves to be.
And in some cases religion embodies wisdom that a civilization has accumulated for centuries, so it may be against practices that do, in fact, have harmful social consequences. Government has to be alert to that possibility, at least. Rather than blindly legalizing everything in sight, it should cautiously lift the restraints little by little, and gauge the effects on society as a whole.
In this complex interaction of forces, the right balance can be found, with some religious groups proposing restrictions, while other groups and more secular individuals propose freedoms. Corporations, meanwhile, will tend to favor whichever philosophy makes them money, and government can play referee.
Restricting the religious and nationalistic forces that lead to war are undoubtedly corporations’ greatest achievement. A potentially close second is the restriction of religious forces that would, otherwise, arbitrarily limit freedoms. After those two fairly intangible benefits for society come a host of tangible benefits in the form of improved products and packaging.
The advances in food packaging and preparation, just in my lifetime, has been staggering. I once started writing a list of things that did not exist when I was growing up. I stopped when I got to 4 pages. With respect to food, that list included the following items:
- Flash freezing and “fresh at the farm” canning: Foods are picked when they’re ripe and packaged so quickly that most of their essential nutrients are preserved. For that reason, canned and frozen vegetables are often healthier than the “fresh produce” that was picked when green, in order to survive transportation and storage.
- Small cans: Nice little “single-serving” cans. They’re not only great for individuals, but useful for recipes as well: “Mix two large cans of this and one small can of that…”
- Easy-open, “pop-top” cans: With these, you don’t even need a can-opener, anymore. Very convenient.
- Prepared and washed foods: Pre-cut lettuce for salads. Shredded carrots. All ready to eat and use.
- Resealable plastic bags: Of course, purists would argue that plastic bags are simply that much more garbage. I understand their point. But they do help to keep things fresh. And as long as we’re using them, it’s nice to be able to seal them up again!
Corporations are capable of doing a lot of good, as long as their efforts are harnessed in the best interests of society — and society’s only viable means of control is government. The problems start when corporations interfere in the political processes that would otherwise serve to restrict their behavior. In America, they currently dominate those processes, and their short-sighted behavior is producing the very real possibility of virtual economic slavery around the globe within the next 50 years. If that threat can be neutralized, however, corporations have the potential to help mankind turn the planet into the archetypal Garden of Eden that is our dream.
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